Republic of the
Supreme Court
NATIONAL POWER
CORPORATION,
Petitioner, -
versus - Respondent. |
G.R. No. 171586
Present: CARPIO MORALES, J., Acting Chairperson, LEONARDO-DE CASTRO, BRION,
ABAD, and perez, JJ. Promulgated: January 25, 2010 |
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R E S O L U T I O N
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BRION, J.: |
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The petitioner National Power Corporation (Napocor) filed the present motion for
reconsideration[1]
of the Court’s Decision of
BACKGROUND FACTS
The 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 (nota bene, 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:
x x x x
(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;
x x x x
(e)
Machinery and equipment used for pollution control and environmental
protection.
x x x x
Assuming that it cannot claim the above tax exemptions, Napocor argued
that it is entitled to certain tax
privileges, namely:
a.
the lower assessment level of 10% under
Section 218(d) of the LGC for government-owned and controlled corporations
engaged in the generation and transmission of electric power, instead of the
80% assessment level for commercial properties imposed in the assessment
letter; and
b.
an allowance for depreciation of the
subject machineries under Section 225 of the LGC.
In the Court’s Decision of
Under Section 226 of the LGC,[3] 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.
To prove that it had legal interest in the taxed
machineries, Napocor relied on:.
1.
the stipulation in the BOT Agreement that authorized the
transfer of ownership to Napocor after 25 years;
2.
its authority to control and supervise the construction and
operation of the power plant; and
3.
its obligation to pay for all taxes that may be incurred, as
provided in the BOT Agreement.
Napocor posited that these indicated that Mirant only possessed naked
title to the machineries.
We denied the first argument by ruling that legal interest should be one that is actual
and material, direct and immediate, not simply contingent or expectant.[4] 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 claims, granted Mirant substantial
power in the control and supervision of the power plant’s construction and
operation.[5]
For the third argument, we relied on the Court’s
rulings in Baguio v. Busuego[6]
and Lim v. Manila.[7] 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.[8] 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.
At any rate, even if the Court were to brush aside the
issue of legal interest to protest, Napocor could still not successfully claim
exemption under Section 234 (c) of the LGC because to be entitled to the
exemption under that provision, there must be actual, direct, and exclusive use
of machineries. Napocor failed to
satisfy these requirements.
THE MOTION FOR
RECONSIDERATION
Although Napocor insists that it is entitled to the
tax exemptions and privileges claimed, the primary issue for the Court to
resolve, however, is to determine whether Napocor has sufficient legal
interest to protest the tax assessment because without the requisite
interest, the tax assessment stands, and no claim of exemption or privilege can
prevail.
Section 226 of the LGC, as mentioned, limits the right
to appeal the local assessor’s action to the
owner or the person having legal interest in the property. Napocor posits that it is the beneficial
owner of the subject machineries, with Mirant retaining merely a naked title to
secure certain obligations. Thus, it
argues that the BOT Agreement is a mere financing agreement and is similar to
the arrangement authorized under Article 1503 of the Civil Code, which
declares:
Art. 1503. When
there is a contract of sale of specific goods, the seller may, by the terms of
the contract, reserve the right of possession or ownership in the goods until
certain conditions have been fulfilled. The right of possession or ownership
may be thus reserved notwithstanding the delivery of the goods to the buyer or
to a carrier or other bailee for the purpose of transmission to the buyer.
Where goods are
shipped, and by the bill of lading the goods are deliverable to the seller or
his agent, or to the order of the seller or of his agent, the seller thereby reserves
the ownership in the goods. But, if except for the form of the bill of lading,
the ownership would have passed to the buyer on shipment of the goods, the seller's property in the goods shall be
deemed to be only for the purpose of securing performance by the buyer of his
obligations under the contract.
x x x x
Pursuant to this arrangement, Mirant’s ownership over the subject
machineries is merely a security interest, given only for the purpose of
ensuring the performance of Napocor’s obligations.
Napocor additionally contends that its contractual
assumption liability (through the BOT Agreement) for all taxes vests it with
sufficient legal interest because it is actually, directly, and materially
affected by the assessment.
While its motion for reconsideration was pending,
Napocor filed a Motion to Refer the Case
to the Court En Banc considering that “the issues raised have far-reaching
consequences in the power industry, the country’s economy and the daily lives
of the Filipino people, and since it involves the application of real property
tax provision of the LGC against Napocor, an exempt government
instrumentality.”[9]
Also, the Philippine Independent Power Producers
Association, Inc. (PIPPA) filed a Motion for Leave to Intervene and a Motion for Reconsideration-in-Intervention. PIPPA is a non-stock corporation comprising
of privately-owned power generating companies which includes TeaM Energy
Corporation (TeaM Energy), successor
of Mirant. PIPPA is claiming interest in
the case since any decision here will affect the other members of PIPPA, all of
which have executed similar BOT agreements with Napocor.
THE COURT’S RULING
At the outset, we resolve
to deny the referral of the case to the Court en banc. We do not find the
reasons raised by Napocor meritorious enough to warrant the attention of the
members of the Court en banc, as they
are merely reiterations of the arguments it raised in the petition for review
on certiorari that it earlier filed
with the Court.[10]
Who may appeal a real property tax
assessment
Legal interest is defined as interest in property or a
claim cognizable at law, equivalent to that
of a legal owner who has legal title to the property.[11] Given this definition, Napocor is clearly not
vested with the requisite interest to protest the tax assessment, as it is not
an entity having the legal title over the machineries. It has absolutely no solid claim of ownership
or even of use and possession of the machineries, as our
A BOT agreement is not a mere financing arrangement. In Napocor
v. CBAA[12] – a case strikingly similar to the one
before us, we discussed the nature of BOT agreements in the following manner:
The underlying concept behind a BOT agreement is
defined and described in the BOT law as follows:
Build-operate-and-transfer – A contractual arrangement whereby the project proponent
undertakes the construction, including financing, of a given infrastructure
facility, and the operation and maintenance thereof. The project proponent
operates the facility over a fixed term during which it is allowed to charge
facility users appropriate tolls, fees, rentals, and charges not exceeding
those proposed in its bid or as negotiated and incorporated in the contract to
enable the project proponent to recover its investment, and operating and
maintenance expenses in the project. The
project proponent transfers the facility to the government agency or local
government unit concerned at the end of the fixed term which shall not
exceed fifty (50) years x x x x.
Under this 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. Thus, the government is able
to put up projects and provide immediate services without the burden of the
heavy expenditures that a project start up requires.
A reading of the provisions of the parties’ BOT
Agreement shows that it fully conforms to this concept. By its express terms, BPPC has complete
ownership – both legal and beneficial – of the project, including the
machineries and equipment used, subject only to the transfer of these
properties without cost to NAPOCOR after the lapse of the period agreed upon. As agreed upon, BPPC provided the funds for
the construction of the power plant, including the machineries and equipment
needed for power generation; thereafter, it actually operated and still
operates the power plant, uses its machineries and equipment, and receives
payment for these activities and the electricity generated under a defined
compensation scheme. Notably, BPPC – as owner-user – is responsible for any
defect in the machineries and equipment.
x x x x
That
some kind of “financing” arrangement is contemplated – in the sense that the
private sector proponent shall initially shoulder the heavy cost of
constructing the project’s buildings and structures and of purchasing the
needed machineries and equipment – is undeniable. The arrangement, however, goes beyond the
simple provision of funds, since the private sector proponent not only
constructs and buys the necessary assets to put up the project, but operates
and manages it as well during an agreed period that would allow it to recover
its basic costs and earn profits. In
other words, the private sector proponent goes into business for itself,
assuming risks and incurring costs for its account. If it receives support from the government at
all during the agreed period, these are pre-agreed items of assistance geared
to ensure that the BOT agreement’s objectives – both for the project proponent
and for the government – are achieved.
In this sense, a BOT arrangement is sui generis and is different from the usual financing arrangements
where funds are advanced to a borrower who uses the funds to establish a
project that it owns, subject only to a collateral security arrangement to
guard against the nonpayment of the loan.
It is different, too, from an arrangement where a government agency
borrows funds to put a project from a private sector-lender who is thereafter
commissioned to run the project for the government agency. In the latter case, the government agency is
the owner of the project from the beginning, and the lender-operator is merely
its agent in running the project.
If
the BOT Agreement under consideration departs at all from the concept of a BOT
project as defined by law, it is only in the way BPPC’s cost recovery is
achieved; instead of selling to facility users or to the general public at
large, the generated electricity is purchased by NAPOCOR which then resells it
to power distribution companies. This
deviation, however, is dictated, more than anything else, by the structure and
usages of the power industry and does not change the BOT nature of the
transaction between the parties.
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 NAPOCOR’s is contingent and, at this stage of the BOT
Agreement, not sufficient to support its claim for tax exemption. Thus, the CTA committed no reversible error
in denying NAPOCOR’s claim for tax exemption. [Emphasis supplied.]
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[13]
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 x x x. [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;[14] and
b.
file sufficient documentary evidence supporting its claim for
tax exemption.[15]
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.
A review of the provisions of the LGC on real property
taxation shows that the phrase has been repeatedly adopted and used to define
an entity:
a.
in whose name the real property shall be listed, valued, and
assessed;[16]
b.
who may be summoned by the local assessor to gather
information on which to base the market value of the real property;[17]
c.
who may protest the tax assessment before the LBAA[18]
and may appeal the latter’s decision to the CBAA;[19]
d.
who may be liable for the idle land tax,[20]
as well as who may be exempt from the same;[21]
e.
who shall be notified of any proposed ordinance imposing a
special levy,[22]
as well as who may object the proposed ordinance;[23]
f.
who may pay the real property tax;[24]
g.
who is entitled to be notified of the warrant of levy and
against whom it may be enforced;[25]
h.
who may stay the public auction upon payment of the
delinquent tax, penalties and surcharge;[26] and
i.
who may redeem the property after it was sold at the public
auction for delinquent taxes.[27]
For the Court to consider an entity assuming another person’s tax
liability by contract as a person having
legal interest in the real property would extend to it the privileges and
responsibilities enumerated above. The
framers of the LGC certainly did not contemplate that the listing, valuation,
and assessment of real property can be made in the name of such entity; nor did
they intend to make the warrant of levy enforceable against it. Insofar as the provisions of the LGC are
concerned, this entity is a party foreign to the operation of real property tax
laws and could not be clothed with any legal interest over the property apart
from its assumed liability for tax. The
rights and obligations arising from the BOT Agreement between Napocor and
Mirant were of no legal interest to the tax collector – the
Some authorities consider a person whose pecuniary interests is or
may be adversely affected by the tax assessment as one who has legal
interest in the property (hence, possessed of the requisite standing to protest
it), citing Cooley’s Law on Taxation.[29] The reference to this foreign material,
however, is misplaced. The tax laws of
the United States deem it sufficient that a person’s pecuniary interests are affected by the tax assessment to consider
him as a person aggrieved and who may thus avail of the judicial or
administrative remedies against it. As
opposed to our LGC, mere pecuniary interest is not sufficient; our law has
required legal interest in the
property taxed before any administrative or judicial remedy can be
availed. The right to appeal a tax
assessment is a purely statutory right; whether a person challenging an
assessment bears such a relation to the real property being assessed as to
entitle him the right to appeal is determined by the applicable statute – in
this case, our own LGC, not US federal or state tax laws.
In light of our ruling
above, PIPPA’s motion to intervene and motion for reconsideration-in-intervention
is already mooted. PIPPA as an organization of independent power producers is
not an interested party insofar as this case is concerned. Even if TeaM Energy, as Mirant’s successor,
is included as one of its members, the motion to intervene and motion for
reconsideration-in-intervention can no longer be entertained, as it amounts to
a protest against the tax assessment that was filed without the complying with
Section 252 of the LGC, a matter that we shall discuss below. Most importantly, our Decision has not
touched or affected at all the contractual stipulations between Napocor and its
BOT partners for the former’s assumption of the tax liabilities of the latter.
Payment under protest is required before an
appeal to the LBAA can be made
Apart from Napocor’s failure to prove that it has
sufficient legal interest, a further review of the records revealed another
basis for disregarding Napocor’s protest against the assessment.
The LBAA dismissed Napocor’s petition for exemption
for its failure to comply with Section 252 of the LGC[30]
requiring payment of the assailed tax before any protest can be made. Although the CBAA ultimately dismissed
Napocor’s appeal for failure to meet the requirements for tax exemption, it
agreed with Napocor’s position that “the protest contemplated in Section 252
(a) is applicable only when the taxpayer is questioning the reasonableness or
excessiveness of an assessment. It
presupposes that the taxpayer is subject to the tax but is disputing the
correctness of the amount assessed. It
does not apply where, as in this case, the legality of the assessment is put in
issue on account of the taxpayer’s claim that it is exempt from tax.” The CTA en
banc agreed with the CBAA’s discussion, relying mainly on the cases of Ty v. Trampe[31] and Olivarez
v. Marquez.[32]
We disagree. The cases of Ty and Olivarez must be
placed in their proper perspective.
The petitioner in Ty
v. Trampe questioned before the trial court the increased real estate taxes
imposed by and being collected in
The Court, through former Chief Justice Artemio Panganiban,
declared that Ty correctly filed a petition for prohibition before the trial
court against the assailed act of the city assessor and treasurer. The
administrative protest proceedings provided in Section 252 and 226 will not
apply. The protest contemplated under Section 252 is required where there is a
question as to the reasonableness or
correctness of the amount assessed. Hence, if a taxpayer disputes the
reasonableness of an increase in a real property tax assessment, he is required
to "first pay the tax" under protest.
Otherwise, the city or municipal treasurer will not act on his
protest. Ty however was 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 were not
questions merely of amounts of the increase in the tax but attacks on the very
validity of any increase. Moreover, Ty
was raising a legal question that is properly cognizable by the trial court; no
issues of fact were involved. In
enumerating the power of the LBAA, Section 229 declares that “the proceedings
of the Board shall be conducted solely for the purpose of ascertaining the
facts x x x.” Appeals to the LBAA (under
Section 226) are therefore fruitful only where questions of fact are
involved.
Olivarez v. Marquez, on the other hand,
involved a petition for certiorari, mandamus, and prohibition questioning
the assessment and levy made by the City of
Like
Olivarez, Napocor, by claiming exemption from realty taxation, is simply
raising a question of the correctness of the assessment. A
claim for tax exemption, whether full or partial, does not question the
authority of local assessor to assess real property tax. This may be inferred from Section 206 which
states that:
SEC. 206. Proof of Exemption of Real Property from
Taxation. - Every person by or for whom real property is declared, who
shall claim tax exemption for such property under this Title shall file with
the provincial, city or municipal assessor within thirty (30) days from the
date of the declaration of real property sufficient documentary evidence in
support of such claim including corporate charters, title of ownership,
articles of incorporation, bylaws, contracts, affidavits, certifications and
mortgage deeds, and similar documents. If
the required evidence is not submitted within the period herein prescribed, the
property shall be listed as taxable in the assessment roll. However, if the
property shall be proven to be tax exempt, the same shall be dropped from the
assessment roll. [Emphasis
provided]
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
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 x x appeal to
the Board of Assessment Appeals x x x,” should be read in conjunction with
Section 252 (d), which states that “in the event that the protest is denied x x x, 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.
For the foregoing reasons, we DENY the petitioner’s motion for reconsideration.
SO ORDERED.
ARTURO
D. BRION
Associate
Justice
WE CONCUR:
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CONCHITA CARPIO MORALES Associate
Justice Acting Chairperson |
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TERESITA J. LEONARDO-DE CASTRO Associate
Justice |
ROBERTO A. ABAD Associate
Justice |
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JOSE P. PEREZ Associate
Justice |
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ATTESTATION
I attest that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
Associate
Justice
Acting Chairperson
CERTIFICATION
REYNATO S. PUNO
Chief Justice
[1] Rollo, pp. 498-517.
[2] FELS Energy Inc. v. Province of Batangas, G.R. No. 168557, February 16, 2007, 516 SCRA 186.
[3] SEC. 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.
[4] Citing Cariño v. Ofilado, G.R. No. 102836,
[5] Citing Articles 2.1,
3.1, 5.1, and 5.3 of the Energy Conversion Agreement.
[6] 188 Phil. 218 (1980).
[7] G.R. No. 90639,
[8] CIVIL CODE, Article
1311.
[9] Rollo, p. 535.
[10] Supreme Court Circular
No. 2-98.
[11] Black’s Law Dictionary (5th ed.), pp. 805-806.
[12] G.R. No. 171470,
[13] 313 Phil. 296, 323, 326 (1995).
[14] SEC. 202. Declaration of Real Property by the Owner or Administrator. - It shall be the duty of all persons, natural or juridical, owning or administering real property, including the improvements therein, within a city or municipality, or their duly authorized representative, to prepare, or cause to be prepared, and file with the provincial, city or municipal assessor, a sworn statement declaring the true value of their property, whether previously declared or undeclared, taxable or exempt, which shall be the current and fair market value of the property, as determined by the declarant. Such declaration shall contain a description of the property sufficient in detail to enable the assessor or his deputy to identify the same for assessment purposes. The sworn declaration of real property herein referred to shall be filed with the assessor concerned once every three (3) years during the period from January first (1st) to June thirtieth (30th) commencing with the calendar year 1992. [emphasis provided]
[15] SEC. 206. Proof of Exemption of Real Property from Taxation. - Every person by or for whom real property is declared, who shall claim tax exemption for such property under this Title shall file with the provincial, city or municipal assessor within thirty (30) days from the date of the declaration of real property sufficient documentary evidence in support of such claim including corporate charters, title of ownership, articles of incorporation, bylaws, contracts, affidavits, certifications and mortgage deeds, and similar documents. If the required evidence is not submitted within the period herein prescribed, the property shall be listed as taxable in the assessment roll. However, if the property shall be proven to be tax exempt, the same shall be dropped from the assessment roll.
[16] SEC. 205. Listing
of Real Property in the Assessment Rolls. - (a) In every province and city,
including the municipalities within the Metropolitan Manila Area, there shall
be prepared and maintained by the provincial, city or municipal assessor an
assessment roll wherein shall be listed all real property, whether taxable or
exempt, located within the territorial jurisdiction of the local government
unit concerned. Real property shall be
listed, valued and assessed in the name of the owner or administrator, or
anyone having legal interest in the property. x x x x.
[17] SEC. 213. Authority of Assessor to Take Evidence. - For the purpose of obtaining information on which to base the market value of any real property, the assessor of the province, city or municipality or his deputy may summon the owners of the properties to be affected or persons having legal interest therein and witnesses, administer oaths, and take deposition concerning the property, its ownership, amount, nature, and value.
[18] Supra note 3.
[19] SEC. 229. Action
by the Local Board of Assessment Appeals. – x x x x
(c) The secretary of the Board shall furnish the
owner of the property or the person having legal interest therein and the
provincial or city assessor with a copy of the decision of the Board. In case
the provincial or city assessor concurs in the revision or the assessment, it
shall be his duty to notify the owner of the property or the person having
legal interest therein of such fact using the form prescribed for the purpose.
The owner of the property or the person
having legal interest therein or the assessor who is not satisfied with the
decision of the Board, may, within thirty (30) days after receipt of the
decision of said Board, appeal to the Central Board of Assessment appeals, as
herein provided. The decision of the Central Board shall be final and
executory.
[20] SEC. 237. Idle
Lands, Coverage. - For purposes of real property taxation, idle lands shall
include the following:
(a) "Agricultural lands, more than
one (1) hectare in area, suitable for cultivation, dairying, inland fishery,
and other agricultural uses, one-half (1/2) of which remain uncultivated or
unimproved by the owner of the property
or person having legal interest therein." Agricultural lands planted
to permanent or perennial crops with at least fifty (50) trees to a hectare
shall not be considered idle lands. Lands actually used for grazing purposes
shall likewise not be considered idle lands.
(b) Lands, other than agricultural,
located in a city or municipality, more than one thousand (1,000) square meters
in area one-half (1/2) of which remain unutilized or unimproved by the owner of the property or person having
legal interest therein. Regardless of land area, this Section shall
likewise apply to residential lots in subdivisions duly approved by proper
authorities, the ownership of which has been transferred to individual owners,
who shall be liable for the additional tax: Provided, however, That individual
lots of such subdivisions, the ownership of which has not been transferred to
the buyer shall be considered as part of the subdivision, and shall be subject
to the additional tax payable by subdivision owner or operator.
[21] SEC. 238. Idle
Lands Exempt from Tax. - A province or city or a municipality within the
Metropolitan Manila Area may exempt idle lands from the additional levy by
reason of force majeure, civil disturbance, natural calamity or any cause or
circumstance which physically or legally prevents the owner of the property or person having legal interest therein from
improving, utilizing or cultivating the same.
[22] SEC. 242. Publication
of Proposed Ordinance Imposing a Special Levy. - Before the enactment of an
ordinance imposing a special levy, the sanggunian concerned shall
conduct a public hearing thereon; notify in writing the owners of the real property to be affected or the persons having legal
interest therein as to the date and place thereof and afford the latter the
opportunity to express their positions or objections relative to the proposed
ordinance.
[23] SEC. 244. Taxpayers'
Remedies Against Special Levy. - Any
owner of real property affected by a special levy or any person having a legal
interest therein may, upon receipt of the written notice of assessment of
the special levy, avail of the remedies provided for in Chapter 3, Title Two,
Book II of this Code.
[24] SEC. 250. Payment
of Real Property Taxes in Installments. - The owner of the real property or the person having legal interest therein
may pay the basic real property tax and the additional tax for Special
Education Fund (SEF) due thereon without interest in four (4) equal
installments; the first installment to be due and payable on or before March
Thirty-first (31st); the second installment, on or before June Thirty (30); the
third installment, on or before September Thirty (30); and the last installment
on or before December Thirty-first (31st), except the special levy the payment
of which shall be governed by ordinance of the sanggunian concerned. The
date for the payment of any other tax imposed under this Title without interest
shall be prescribed by the sanggunian concerned. Payments of real
property taxes shall first be applied to prior years delinquencies, interests,
and penalties, if any, and only after said delinquencies are settled may tax
payments be credited for the current period.
[25] SEC. 258. Levy
on Real Property. - After the expiration of the time required to pay the
basic real property tax or any other tax levied under this Title, real property
subject to such tax may be levied upon through the issuance of a warrant on or
before, or simultaneously with, the institution of the civil action for the
collection of the delinquent tax. The provincial or city treasurer, or a
treasurer of a municipality within the Metropolitan Manila Area, as the case
may be, when issuing a warrant of levy shall prepare a duly authenticated certificate
showing the name of the delinquent owner
of the property or person having legal interest therein, the description of
the property, the amount of the tax due and the interest thereon. The warrant
shall operate with the force of a legal execution throughout the province, city
or a municipality within the Metropolitan Manila Area. The warrant shall be
mailed to or served upon the delinquent owner
of the real property or person having legal interest therein, or in case he
is out of the country or cannot be located, to the administrator or occupant of
the property. At the same time, written notice of the levy with the attached
warrant shall be mailed to or served upon the assessor and the Registrar of
Deeds of the province, city or a municipality within the Metropolitan Manila
Area where the property is located, who shall annotate the levy on the tax
declaration and certificate of title of the property, respectively. The levying
officer shall submit a report on the levy to the sanggunian concerned
within ten (10) days after receipt of the warrant by the owner of the property
or person having legal interest therein.
[26] SEC. 260. Advertisement
and
[27] SEC. 254. Notice
of Delinquency in the Payment of the Real Property Tax. – x x x x
(b)
Such notice shall specify the date upon which the tax became delinquent and
shall state that personal property may be distrained to effect payment. It
shall likewise state that at any time before the distraint of personal
property, payment of the tax with surcharges, interests and penalties may be
made in accordance with the next following Section, and unless the tax,
surcharges and penalties are paid before the expiration of the year for which
the tax is due except when the notice of assessment or special levy is
contested administratively or judicially pursuant to the provisions of Chapter
3, Title II, Book II of this Code, the delinquent real property will be sold at
public auction, and the title to the property will be vested in the purchaser,
subject, however, to the right of the delinquent owner of the property or any person having legal interest therein
to redeem the property within one (1) year from the date of sale.
SEC.
261. Redemption of Property Sold. - Within one (1) year from the date of
sale, the owner of the delinquent real
property or person having legal interest therein, or his representative,
shall have the right to redeem the property upon payment to the local treasurer
of the amount of the delinquent tax, including the interest due thereon, and
the expenses of sale from the date of delinquency to the date of sale, plus
interest of not more than two percent (2%) per month on the purchase price from
the date of sale to the date of redemption. Such payment shall invalidate the
certificate of sale issued to the purchaser and the owner of the delinquent
real property or person having legal interest therein shall be entitled to a
certificate of redemption which shall be issued by the local treasurer or his
deputy. From the date of sale until the expiration of the period of redemption,
the delinquent real property shall remain in the possession of the owner or
person having legal interest therein who shall be entitled to the income and
other fruits thereof. The local treasurer or his deputy, upon receipt from the
purchaser of the certificate of sale, shall forthwith return to the latter the
entire amount paid by him plus interest of not more than two percent (2%) per
month. Thereafter, the property shall be free from the lien of such delinquent
tax, interest due thereon and expenses of sale.
[28] Hamilton Mfg. Co. v. City of
[29] Cooley on Taxation (4th ed.), Volume 3, §1207, p. 2420.
[30] SEC. 252. Payment Under Protest. - (a) No protest shall be entertained unless the taxpayer first pays the tax. There shall be annotated on the tax receipts the words "paid under protest". The protest in writing must be filed within thirty (30) days from payment of the tax to the provincial, city treasurer or municipal treasurer, in the case of a municipality within Metropolitan Manila Area, who shall decide the protest within sixty (60) days from receipt.
(b) The tax or a portion thereof paid under protest, shall be held in trust by the treasurer concerned.
(c) In the event that the protest is finally decided in favor of the taxpayer, the amount or portion of the tax protested shall be refunded to the protestant, or applied as tax credit against his existing or future tax liability.
(d) In the event that the protest is denied or upon the lapse of the
sixty day period prescribed in subparagraph (a), the taxpayer may avail of the
remedies as provided for in Chapter 3, Title II, Book II of this Code.
[31] 321 Phil. 81, 101-102 (1995).
[32] G.R. No. 155591,