Remedies Under The Lgc _ Movido Outline

REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. I. Local Taxes in General A. Assessment/Collection 1. Accrual/Tax Period/ Manner of Payment/ Surcharge and Penalties Sec. 165. Tax Period and Manner of Payment -calendar year -may be paid in quarterly installments Sec. 166. Accrual of Tax. -on 1st day of January -if NEW tax: 1st day of the quarter next following the effectivity of the ordinance imposing new tax Sec. 167. Time of Payment. GR: w/n first 20d of …January …Subsequent quarter (if new tax) X: unless provided by this code …EXTENSION: extended by the Sanggunian -for a justifiable reason -only for 6m max Sec. 168. Surcharges and Penalties on Unpaid Taxes, Fees, or Charges. -sanggunian may impose -SURCHARGE: 25% of amt of unpaid TFC MAX -INTEREST: 2% per month of unpaid TFC + surcharge (until amt paid) …TOTAL interest: max of 36m! (*so if di ka pa bayad after 36m di ka na nila sisingilin or di ka na lang nila iimposan ng interest?) Sec. 169. Interests on Other Unpaid Revenues. -Amt due (not: TFC/VOLUNTARY contributions/Donations) -not paid *on the date fixed by the: …ordinance …contract *or upon the occurrence of the event which gave rise to collection INTEREST: 2% pm but TOTAL INTEREST max 36months Sec. 170. Collection of Local Revenues by Treasurer. -All TFC collected by respective treasurers/deputies -provincial/city/municipal treasurer designates brgy treasurer as deputy: BOND required (premiums of the bond paid by provincial/city/municipal gov’t) Sec. 171. Examination of Books of Accounts and Pertinent Records of Businessmen by Local Treasurer. WHO examines: P/C/M/B treasurer Deputy authorized in writing WHAT SHOULD BE CONTAINED IN THE WRITTEN AUTHORITY: 1. name, address, and business of the taxpayer whose books, accounts, and pertinent records are to be examined

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2. date and place of such examination 3. procedure to be followed in conducting the same WHAT to examine: books, accounts, and other pertinent records (BAR) Of WHAT: person, partnership, corporation, or association subject to local TFC (PPCA) WHY: in order to ascertain, assess, and collect the correct amount of the TFC WHEN: regular business hours only once for every tax period CERTIFICATION: by the examining official made of record in the books of accounts of the taxpayer examined *RECORDS of the RDO of BIR should be made available to the examining official

2. Collection of the Tax CHAPTER 4. Civil Remedies for Collection of Revenues (Remedies of the LGU) Sec. 172. Application of Chapter. for the collection of any delinquent local tax, fee, charge, or other revenue Sec. 173. Local Government's Lien. -local TFCR constitute a SUPERIOR LIEN: upon any property/rights which may be subject to the lien/property used in business, occupation, practice of profession/calling -ENFORCEMENT: ….administrative action …judicial action -EXTINGUISHMENT: full payment of the delinquent local TFC + surcharge + interest Sec. 174. Civil Remedies. (a) By administrative action through distraint of goods, chattels, or effects, and other personal property of whatever character, including stocks and other securities, debts, credits, bank accounts, and interest in and rights to personal property, and by levy upon real property and interest in or rights to real property; and (b) By judicial action. …concurrently or simultaneously (discretion of LGU) *NOTE: Distraint: Personal Property = Levy: Real Property Sec. 175. Distraint of Personal Property. (a) Seizure When: Upon failure of the person owing any local TFC to pay the same at the time required Who: the local treasurer/deputy How: upon written notice

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local treasurer /deputy issue a duly authenticated certificate based upon the records of his office Contents of the certificate: *fact of delinquency * amounts of the TFC * amount of penalty due

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REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. - Such certificate shall serve as sufficient warrant for the distraint of personal property aforementioned, subject to the taxpayer's right to claim exemption under the provisions of existing laws. What: any personal property belonging to that person /any personal property subject to the lien in sufficient quantity to satisfy the TFC in question + any increment thereto incident to delinquency and the expenses of seizure. - Distrained personal property shall be sold at public auction in the manner herein provided for. (b) Accounting of distrained goods. Who: officer executing the distraint What: goods, chattels or effects distrained Formalities: a copy of the account made signed by himself shall be left either with the owner or person from whose possession the goods, chattels or effects are taken, or at the dwelling or place of business of that person and with someone of suitable age and discretion, to which list shall be added a statement of the sum demanded and a note of the time and place of sale. (c) Publication -Where: min 3 public and conspicuous places in the territory of the local government unit where the distraint is made (including office of the chief executive of the local government unit in which the property is distrained) -contents: >time >place >articles distrained -TIME Of sale: not be less than twenty (20) days after notice to the owner or possessor of the property and the publication or posting of the notice (d) Release of distrained property upon payment prior to sale. Restore goods to the owner (e) Procedure of sale -sell at PUBLIC AUCTION -to the HIGHEST BIDDER FOR CASH -w/n 5d after the sale, LOCAL TREASURER shall make a WRITTEN REPORT OF THE PROCEEDINGS to the local chief executive **IF NOT SOLD w/n 120d fr date of distraint: considered sold to the LGU concerned for amt assessed by COAppraisal, tax delinquencies cancelled to extent of same amount *CoAppraisal: city/municipal treasurer + rep of COA + city/municipal assessor (f) Disposition of proceeds -apply to satisfy: tax + surcharges + interest + other penalties incident to delinquency + (expenses of the distraint + expenses of the sale)* -if may natira: return to owner of property sold -if kulang: other property of the delinquent taxpayer may be distrained until full amount due + all expenses collected *actual expenses of seizure and preservation of the property pending sale; DOES NOT INCLUDE services of the local officer/deputy

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Sec. 176. Levy on Real Property. When: After the expiration of the time required to pay the delinquent TFC …before/simultaneously/after distraint of personal property What: real property How: provincial/city/municipal treasurer prepare duly authenticated certificate …contents: 1. name of taxpayer 2. amt of TFC 3. amt of penalty due 4. + write upon certificate the description of the property upon which the levy is made …certificate operate w/ force of a legal execution throughout the Philippines + mail/serve WRITTEN NOTICE OF LEVY upon: 1. assessor: annotate on tax declaration of property 2. Register of Deeds where property located: annotate the levy on the certificate of title of property 3. delinquent taxpayer (if absent: to agent/manager of business/occupant of property if first 2 wala) ***If Levy not issued BEFORE OR SIMULTANEOUSLY with Distraint + personal property INSUFFICIENT to satisfy delinquency: provincial/city/municipal treasurer proceed with levy on RP w/n 30d after execution of distraint Report on levy: w/n 10d from receipt of warrant + submitted to sanggunian concerned (not local chief exec) Sec. 177. Penalty for Failure to Issue and Execute Warrant. criminal prosecution under RPC +AUTOMATIC DISMISSAL from service (Req’s):

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Treasurer fails to issue/execute the warrant of distraint/levy after expiration of time prescribed (which is after the expiration of time required to pay the delinquent TFC); or (2) Treasurer found guilty of abusing the exercise of power (3) Due notice and Hearing (Due Process) Sec. 178. Advertisement and Sale. When: Within thirty (30) days after levy Period: at least thirty (30) days How: A. posting a notice at (1) the main entrance of the municipal building or city hall (2) a public and conspicuous place in the barangay where the real property is located B. publication once a week for three (3) weeks in a newspaper of general circulation in the province, city or municipality where the property is located Contents:

a. b. c.

amount of TFC penalties due time and place of sale

d.

name of the taxpayer against whom the TFC are levied e. short description of the property to be sold STAY of SALE: payment by taxpayer of the TFC+ penalties +interests If no payment before date of sale: sale proceed

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REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. SALE… Where. A. at the main entrance of the provincial, city or municipal building B. on the property to be sold C. at any other place as determined by the local treasurer conducting the sale and specified in the notice of sale. REPORT TO THE SANGGUNIAN of sale: W/n 30d after sale; form part of records of the local treasurer CERTIFICATE of SALE: …issued when: after consultation with the sanggunian …made and delivered by local treasurer …Contents: a. proceedings of the sale

b. c.

description of the property sold name of the purchaser

d. exact amount of all TFC + surcharges + interests + penalties May sobra sa benta: turned over to the owner of the property (delinquent taxpayer) *ADVANCE OF COSTS OF COLLECTION: by ordinance duly approved …COSTS: preservation/transportation/advertisement/sale Sec. 179. Redemption of Property Sold. PERIOD: Within one (1) year from the date of sale WHO allowed: delinquent taxpayer /representative HOW: payment to the local treasurer …how much = (total amount of TFC + surcharges + interests + penalties from the date of delinquency to the date of sale) + (interest of not more than 2% per month on the purchase price from the date of purchase to the date of redemption) EFFECT: A. Certificate of Sale Invalidated

B.

Owner/Delinquent Taxpayer shall be entitled to a certificate of redemption from the provincial, city or municipal treasurer/ deputy What about the purchaser in the public auction: 1. buyer return the certificate of sale

2.

provincial/city/municipal treasurer/deputy return to buyer purchase price + 2%pm interest + portion of cost of sale + other legitimate expenses incurred by buyer AFTER ALL THAT: property thereafter shall be free from the lien of such taxes, fees, or charges, related surcharges, interests, and penalties. * owner (delinquent taxpayer) NOT DEPRIVED OF THE POSSESSION of said property + entitled to the rentals and other income thereof until the expiration of the time allowed for its redemption – so si buyer in public auction could only exercise ownership over said property AFTER 1 yr. Sec. 180. Final Deed to Purchaser. -executed in case the taxpayer fails to redeem the property -conveys to the purchaser so much of the property as has been sold, free from liens of any taxes, fees, charges, related surcharges, interests, and penalties. -recites all the proceedings upon which the validity of the sale depends.

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Sec. 181. Purchase of Property By the Local Government Units for Want of Bidder. When: A. no bidder for the real property advertised for sale B. the highest bid is for an amount insufficient to pay the TFC + surcharges + interests + penalties + costs WHAT HAPPENS: the local treasurer conducting the sale shall purchase the property in behalf of the local government unit concerned to satisfy the claim REPORT: within 2d after buying for LGU *DUTY of the Registrar of Deeds: upon registration with his office of any such declaration of forfeiture: to transfer the title of the forfeited property to the local government unit concerned without the necessity of an order from a competent court (so automatic pag niregister sa RoD, transfer agad sa LGU ung title) REDEMPTION: WHEN: Within 1yr from the date of such forfeiture WHO allowed: taxpayer /representative HOW: pay to local treasurer the full amount of the TFC + related surcharges + interests + penalties + costs of sale If no redemption: ownership shall be fully vested on the LGU concerned Sec. 182. Resale of Real Estate Taken for Taxes, Fees, or Charges (resale nung property na nabili nila kasi walang bidder) HOW: by ordinance duly approved + give notice not less than 20d after sale HOW: public auction PROCEEDS: accrue to the general fund of the local government unit concerned Sec. 183. Collection of Delinquent Taxes, Fees, Charges or Other Revenues Through Judicial Action WHO: LGU concerned through LOCAL TREASURER HOW: civil action WHEN: within the period prescribed in Section 194 of this Code: 3/5/10 yrs Sec. 184. Further Distraint or Levy. repeated if necessary until the full amount due, including all expenses, is collected. Sec. 185. Personal Property Exempt from Distraint or Levy. (TiB CFuP LBP) (a) Tools and implements necessarily used by the delinquent taxpayer in his trade or employment; (b) One (1) horse, cow, carabao, or other beast of burden, such as the delinquent taxpayer may select, and necessarily used by him in his ordinary occupation; (c) His necessary clothing, and that of all his family; (d) Household furniture and utensils necessary for housekeeping and used for that purpose by the delinquent taxpayer, such as he may select, of a value not exceeding Ten thousand pesos (P10,000.00); (e) Provisions, including crops, actually provided for individual or family use sufficient for four (4) months; (f) The professional libraries of doctors, engineers, lawyers and judges; (g) One fishing boat and net, not exceeding the total value of Ten thousand pesos (P10,000.00), by the lawful use of which a fisherman earns his livelihood; and (h) Any material or article forming part of a house or improvement of any real property.

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REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. 3. Assessment of deficiency/delinquent tax Sec. 194. Periods of Assessment and Collection. (a) Local TFC ASSESSMENT: within five (5) years from the date they became due COLLECTION: same period, BARRED IF AFTER But if TFC accrued b4 effectivity of LGC: 3 yrs from due date (b) fraud/ intent to evade: w/n 10years from discovery of the fraud or intent to evade payment. (d) Suspension of prescriptive periods: (1) The treasurer is legally prevented from making the assessment or collection; (2) The taxpayer requests for a reinvestigation and executes a waiver in writing before expiration of the period within which to assess or collect; and (3) The taxpayer is out of the country or otherwise cannot be located.

BLGF Ruling June 13, 2006 F: Synovate, Inc. was assessed deficiency of business tax for 2000-2004 (P718,340.91): allegedly amounts declared by Synovate Inc for business tax purposes for 2000-2004 were underdeclared vs. taxable revenues reported in the audited financial statements of the corporation for base years 1999-2003. Deficiency Business Tax assessed by deriving the business tax corresponding to the amt of gross revenue as reported in the audited financial statements then deducting the amount actually paid. -Synovate wrote to City Treasurer: declaration for business tax BASED ON DEFINITION OF GROSS RECEIPTS (amounts actually/constructively received by it), request RECALL/CANCELLATION OF DEFICIENCY ASSESSMENT -Synovate applied for 2005 Business Permit + completed other prerequisites for renewal + made a tender of payment for assessed business tax, business permit and other fees for 1st quarter of 2005 (279,390.70) – BPLO refused payment + didn’t issue permit UNTIL payment of deficiency tax assessment -Synovate made another tender of payment to BPLO; BPLO only agreed to accept if Synovate would enter compromise agreement with them -W/n 60-d period provided under S195, LGC, Follosco Law Firm (counsels for Synovate) filed FORMAL PROTEST on said deficiency tax assessment + letter to BPLO contesting denial of application for business permit -BPLO only issued TEMPORARY business permit *~*~*~* 1. WON Business taxes should be based on GROSS RECEIPTS YES. The gross revenue as reported in the audited financial statements of Synovate, Inc is not the basis for assessing business tax BUT should be based on money and properties received in consideration of the services rendered or articles sold, exchanged or leased. Sec143 provides that Tax on Business is based on the GROSS SALES or RECEIPTS of the business being taxed for the preceding calendar year. Gross sales/receipts excludes receivables NOT YET COLLECTED. Consideration should already be in the control of the person who rendered the service. 2. WON a LGU can withhold issuance of business tax for nonpayment of deficiency tax NO. The city government IS NOT AUTHORIZED UNDER THE LGC to withhold business permit as a means of enforcing the collection of delinquent taxes. …the specific remedies for enforcing the collection of delinquent taxes (AND IT DOES NOT INCLUDE THE WITHHOLDING OF BUSINESS PERMIT)

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…the taxpayer is entitled under the law to protest a tax assessment. While the legal remedies to contest an assessment is still available to the taxpayer, the local government CANNOT FORCE the taxpayer to pay where such payment is not a requisite for exercising such legal remedies.

California Manufacturing Co. v. City of Las Pinas F: JUNE 9: California Manufacturing (manufacturer of Knorr cubes!) was sent a Letter by City Treasurer of Las Pinas informing CMC that: 1. It had Local Business Tax Deficiency on Non-essential commodities 2. Deficiency RPT Total deficiency: P73,045,634.47 -June 23: CMC’s financial accountant attended a conference with City Treasurer + examiners of Las Pinas …CMC also personally served LETER (dated June 23) requesting ample time to consider the validity of the assessment + asking specific rulings and ordinances supporting their claim …City Treasurer also issued a reply: request granted til July 15 to settle tax deficiency -SEPT 1: CMC filed a supplemental protest vs. assessment for local business tax -OCT 16: CMC filed petition protesting the assessment for local business tax from 1999-June 30, 2003 B4 RTC + cancellation of assessment -Las Pinas filed MD: (1) CMC no legal capacity to sue (person who signed verification was not an authorized officer: (2) RTC no jurisdiction – assessment attained finality due to lack of timely protest (only til July 15!) RTC: Granted MD: NO Jurisdiction over the subject matter: CMC was given 60d after notice of assessment to contest the assessment. Since the letter informing CMC of assessment was sent June 9, was received June 10, CMC SHOULD HAVE FILED PROTEST ON AUG 9, not SEPT 1 - CMC filed an Omnibus MFR: (1) June 9 letter was not an assessment (bereft of any statement as to the nature of the TFC, the amount of deficiency, the surcharge or interests and penalties); (2) assuming that June 9 letter was an assessment, CMC’s request for ample time partook of the nature of a preliminary protest that tolled the running of the 60-day period to file a protest; (3) if the respondents considered the assessment to be final and unappealable, it would have been natural for the respondents to cite such ground in the denial of the protest. RTC: deny: lack of merit *~*~* WON protest timely filed. NO. Assessments FINAL and EXECUTORY (S195, LGC). Dismiss petition! REQ’s of VALID ASSESSMENT NOTICE: statement of 1. nature of the TFC 2. amount of deficiency 3. amount of surcharges + interests + penalties - Petitioner had sixty (60) days from June 10, 2003 or until August 9, 2003, within which to protest the above assessment. -ESTOPPED na CMC: The June 9 letter has ATTACHMENTS + CMC ADMITTED in Petition for Review that it received the notice of assessment on June 10 +

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REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. petitioner was able to detail the composition of the deficiency tax assessment based on the table audit sent by Las Pinas, able to counterargue the assessment made

B. Taxpayer’s Remedies 1. Protesting an assessment Sec. 195. Protest of Assessment. WHEN: When the local treasurer or his duly authorized representative finds that correct TFC have not been paid HOW: issue a notice of assessment …contents of NOTICE OF ASSESSMENT: 1. nature of the tax, fee or charge 2. the amount of deficiency 3. the surcharges + interests + penalties PERIOD FOR PROTEST: W/n 60d from the receipt of the notice of assessment (WRITTEN PROTEST) EFFECT if NO PROTEST: the assessment shall become final and executory > Local treasurer decide protest W/N 60d from time of filing …if WHOLLY/PARTIALLY MERITORIOUS: local treasurer CANCEL ASSESSMENT …if WHOLLY/PARTLY CORRECT: deny protest wholly/partly W/NOTICE to taxpayer >APPEAL: 30d from receipt of denial of protest/from lapse of 60d period (wherein the local treasurer should have decided on the protest) …with a court of competent jurisdiction IF NO APPEAL: assessment becomes conclusive and unappealable.

a. Protest to the city/municipal treasurer California Manufacturing Co. v. City of Las Pinas, supra. F: CMC was sent a LETTER JUNE 9 informing it of deficiency business tax. CMC requested extension on JUNE 23, which was granted the same date, giving them until JULY 15 to settle tax deficiency. HOWEVER, CMC did not settle tax deficiency, nor filed written protest 60d after receipt of letter of assessment (AUG 10). So when CMC filed SEPT 1 a supplemental protest with local treasurer, and a petition with RTC on OCT 16, LP treasurer filed MD based on lack of jurisdiction of RTC, the assessment having attained finality DUE TO LACK OF TIMELY PROTEST H: NO timely protest filed 1. the June 9 letter is considered a NOTICE OF ASSESSMENT: it had attachments + CMC admitted in their Petition for Review that it received a notice of assessment June 10 + they counterargued the composition of the deficiency tax assessments based on table audit – substantially complied with S195 reqs 2. As June 9 letter is a NOTICE of ASSESSMENT, CMC should have filed protest w/n 60d from receipt of said letter, i.e. 60d from June 10 = Aug10. But since none was filed, assessment deemed final and executory.

San Juan v. Castro F: San Juan conveyed by Deed of Assignment real properties in Marikina City, with consent of wife, to Saints and Angels Realty Corporation (SARC) in exchange for 258,434 shares of stock in total par value of P2,584,340. 200,000 of the said shares of stocks worth P2M were placed in San Juan’s name while the rest were placed in the name of his wife.

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-San Juan wanted to pay transfer tax based on consideration in the Deed of Assignment; Marikina City Treasurer based transfer tax on property’s FMV -San Juan filed written protest to basis of tax due -Castro replied (through a letter) insisting that FMV is the basis -San Juan filed in RTC Marikina Petition for Mandamus and Damages for failure to perform a ministerial duty H: DENY MANDAMUS: In accordance with R65.3, ROC, there should be no other plain, speedy and adequate remedy in the ordinary course of law. …BUT under Section 195 of LGC, a taxpayer who disagrees with a tax assessment made by a local treasurer may file a written protest thereof. ***San Juan SHOULD HAVE EITHER: A. appealed assessment before court of competent jurisdiction (and not petition the court to grant mandamus) OR B. paid tax then refund

b. Appeal to the regular court of competent jurisdiction 2. Claim for refund/tax credit Sec. 196. Claim for Refund of Tax Credit. a. file WRITTEN CLAIM FOR REFUND/CREDIT with local treasurer b. Proceed with COURT ACTION w/n2yrs from date the taxpayer is entitled to a refund/credit

3. Contesting the validity of a new tax ordinance Sec. 186. Power To Levy Other Taxes, Fees or Charges. -LGUs MAY EXERCISE power to levy TFC or charges -LIMITS: 1. NIRC 2. other applicable laws 3. TFC shall not be unjust, excessive, oppressive, confiscatory or contrary to declared national policy 4. ordinance levying such taxes, fees or charges shall not be enacted without any prior public hearing conducted for the purpose. Sec. 187. Procedure for Approval and Effectivity of Tax Ordinances and Revenue Measures; Mandatory Public Hearings. PROCEDURE: in accordance with LGC PUBLIC HEARINGS: conducted for the purpose [of approving tax ordinance] If QUESTION on CONSTITUTIONALITY/LEGALITY of tax ordinance/revenue measures: APPEAL w/n 30d from effectivity TO SOJ >SOJ render deci on appeal w/n 60d from date of receipt of appeal > Appeal SHALL NOT HAVE EFFECT OF SUSPENDING THE EFFECTIVITY OF THE ORDINANCE + ACCRUAL + PAYMENT OF TFC WHEN aggrieved party may file with court of competent jurisdiction: a. w/n 30d after receipt of SOJ deci b. after 60d from appeal w/SOJ, SOJ did not act on appeal Sec. 188. Publication of Tax Ordinances and Revenue Measures. WHEN: Within (10) days after their approval

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REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. HOW: certified true copies of all provincial, city, and municipal tax ordinances or revenue measures shall be published in full …for 3 consecutive days …in a newspaper of local circulation (in lieu thereof: post at 2 conspicuous + publicly accessible places) Sec. 189. Furnishing of Copies of Tax Ordinances and Revenue Measures. Bigay copy to local treasurers for public dissemination. Sec. 190. Attempt to Enforce Void or Suspended Tax Ordinances and Revenue Measures. -after DUE NOTICE of DISAPPROVAL/SUSPENSION of the ordinance/revenue measure -sufficient ground for administrative disciplinary action against the local officials and employees responsible therefor. Sec. 191. Authority of Local Government Units to Adjust Rates of Tax Ordinances. -once every 5 years -shall not exceed 10% of rates under LGC Sec. 192. Authority to Grant Tax Exemption Privileges. -through ordinances duly approved -what can LGU grant: a. tax exemptions b. incentives c. reliefs proviso: under such terms and conditions as they may deem necessary. *power of LGUs to tax limited in 186 so power to grant exemption and privileges also subject Sec. 193. Withdrawal of Tax Exemption Privileges. GR: tax exemptions/incentives granted to/presently enjoyed WITHDRAWN upon effectivity of the LGC X: a. local water districts b. cooperatives duly registered under RA 6938 c. non-stock and non-profit hospitals and educational institutions

Figuerres vs. CA F: Belen Figuerres owns parcel of land in Mandaluyong. She received a notice of assessment from Mandaluyong assessor in 1993. The assessment, effective in 1994, was based on Ordinance Nos. 119 and 125, series of 1993, and Ordinance No. 135, series of 1994, of the Sangguniang Bayan of Mandaluyong. Ordinance No. 119 – contains a schedule of fair market values of the different classes of real property in the municipality. Ordinance No. 125 – fixes the assessment levels applicable to such classes of real property. Ordinance No. 135 – amended Ordinance No. 119, §6 by providing that only one third (1/3) of the increase in the market values applicable to residential lands pursuant to the said ordinance shall be implemented in the years 1994, 1995, and 1996.

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-prohibition suit in CA vs. assessor + treasurer + sangguniang bayan: stop from enforcing ordinances …alleged that ordinances were INVALID for having been adopted WITHOUT: a. public hearings b. prior publication CA: denied *~*~*~* WON exhaustion of administrative remedies obtains under the circumstances. YES -remedy available w/n admin machinery: give admin agency the opportunity to decide the matter correctly + prevent unnecessary and premature resort to courst REMEDIES available to TAXPAYER: a. S187,LGC: question constitutionality/legality on appeal w/n 30d from effectivity of ordinance TO SOJ (mandatory) b. S226, LGC: taxpayer not satisfied with assessment of his property: appeal to Board of Assessment Appeals w/n60d from notice of assessment c. S252, LGC: question excessiveness of amt of tax: i.pay first ii. request annotation of the phrase “paid under protest” iii. appeal to BAA by petition …under oath …with copies of tax declarations + affidavits + documents supporting his appeal WON the City Council of Mandaluyong is empowered to determine and approve the aforecited ordinances without taking into account the mandatory public hearings required by the LGC. NO -prior public hearing MANDATORY -inthese this case: Presumption of validity of ordinances not rebutted by Figuerras as she to limitations merely asserted that no public hearings were conducted when she has the burden of proving the illegality of the passage of the ordinance WON there is a need for publication of tax ordinances. YES. S188 -presumption of validity in favor of the ordinances NOT rebutted by Figuerras, as she did not present any evidences to prove her claim. *Municipality of Mandaluyong presented evidence (testimonial, documentary) to prove that there was prior hearings and publication.

Hagonoy Market Vendor Assn. v. Municipality of Hagonoy F: Hagonoy enacted Kautusan Blg. 28 on Oct. 1996, increasing stall rentals of market vendors in Hagonoy. Art. 3 provided it would take effect upon approval. The ordinance was posted from Nov. 4-25, 1996. -Petitioner Assn’s members were personally given copies on Nov. 1997 -Dec1997:petitioner’s president appealed with the SoJ (over a year after its approval) assailing its constitutionality and claiming it was unaware of the posting. Respondent contended that the ordinance took effect in Oct. 1996 by operation of law and that the appeal was time-barred. SOJ: (1) ordinance’s effectivity retroacted to the date of its approval (2) the appeal was filed beyond the 30 day limit from the date of approval. MFR: Denied by SOJ – appealed with CA CA: denied for formal deficiencies. 2nd MFR denied

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REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. WON petitioner’s appeal was already time-barred. YES H: Sec. 187, LGC periods ARE MANDATORY. Here, they only appealed with SOJ in Dec1997, more than 1 yr after ordinance took effect.

Coca-Cola Philippines v. City of Manila NATURE: Petition for Review on Certiorari under Rule 45 FACTS F: Coke maintains a sales office in Manila. City of Manila approved Tax Ordinance No. 7988 -Tax Ordinance No. 7988("Revised Revenue Code of the City of Manila"): increased the tax rates applicable to certain establishments operating within the territorial jurisdiction of the City of Manila; S21, in effect, imposed additional business tax on businesses that are already subject to business tax -Coke filed petition before SOJ contesting legality of Tax Ordinance SOJ: declared Tax ordinance null and void without legal effect: failed to meet publication requirement, as the said ordinance was ONLY PUBLISHED ONCE IN THE MAY 22 ISSUE OF THE PHILIPPINE POST (instead of 3 consecutive days in a newspaper of local circulation BLGF: issued directive that City of Manila cease and desist from enforcing said tax ordinance -STILL, respondents continued to assess petitioner business tax for the year 2001 based on the tax rates prescribed under Tax Ordinance No. 7988. SO Coke filed a Complaint with the RTC Manila praying that respondents be enjoined from implementing the aforementioned tax ordinance. -During the pendency of the said case, the City Mayor of Manila approved Tax Ordinance No. 8011 ("An Ordinance Amending Certain Sections of Ordinance No. 7988.") -Coke CHALLENGED AGAIN said ordinance before SOJ – not likewise published upon its approval SOJ: 2nd Tax Ordinance ALSO null and void RTC: amendatory ordinance cured defect of first ordinance H: BOTH ORDINANCES NULL AND VOID -Tax Ordinance No. 7988:null and void as said ordinance was published only for one day in the 22 May 2000 issue of the Philippine Post -amendatory ordinance (Tax Ordinance 8011): null and void. Cannot amend nor cure a law which is void, nonexistent in the first place. a. b. c.

When a taxpayer can contest the legality of a tax ordinance: 30d from effectivity Appeal to the SoJ: 60d to decide Appeal to a court of competent jurisdiction

II. Real Property Tax A. Assessment/Collection 1. Assessment of Land Value Sec. 219. General Revision of Assessments and Property Classification. -within 2y after the effectivity of this Code -every 3y thereafter

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Sec. 220. Valuation of Real Property. (a) real property is declared and listed for taxation purposes for the first time; (b) there is an ongoing general revision of property classification and assessment; or (c) a request is made by the person in whose name the property is declared …the provincial, city or municipal assessor /duly authorized deputy shall, in accordance with the provisions of this Chapter, make a classification, appraisal and assessment of the real property listed and described in the declaration irrespective of any previous assessment or taxpayer's valuation thereon …assessment shall not be increased oftener than once every 3 years X: when new improvements substantially increasing the value of said property or of any change in its actual use (even if not yet 3 years, new valuation could be made) Sec. 221. Date of Effectivity of Assessment or Reassessment. RE/ASSESSMENT: EFFECTIVITY made after the January 1: January 1 of the succeeding year made within 90d from date of SPECIAL CAUSE: beginning of quarter next following the reassessment SPECIAL CAUSES a. partial/total destruction b. major change in actual use c. any great and sudden inflation/deflation of RP values d. gross illegality of assessment when made e. any other abnormal clause Sec. 222. Assessment of Property Subject to Back Taxes. Liable for max 10 years prior to the date of initial assessment taxes computed on the basis of the applicable schedule of values in force during the corresponding period WHEN NO INTEREST FOR DELINQUENCY IMPOSED: Taxes paid on or before the end of the quarter following the date the notice of assessment was received by the owner or his representative INTEREST: 2% pm or a fraction thereof from the date of the receipt of the assessment until such taxes are fully paid. Sec. 223. Notification of New or Revised Assessment. WHEN: a. real property is assessed for the first time

b. an existing assessment is increased or decreased … within thirty (30) days WHO: assessor WHAT: give written notice of such new or revised assessment to the person in whose name the property is declared. DELIVERY OF NOTICE: personally/registered mail/through the assistance of the punong barangay to the last known address of the person to be served Sec. 224. Appraisal and Assessment of Machinery. (a) BRAND NEW: FMV = acquisition cost IF OLD: FMV = (remaining economic life/estimated economic life) x replacement/reproduction cost

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REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. (b) IMPORTED:FMV = acquisition cost + freight + insurance + bank and other charges + brokerage + arrastre and handling + duties and taxes + plus cost of inland transportation + handling + installation charges at the present site. The cost in foreign currency of imported machinery shall be converted to peso cost on the basis of foreign currency exchange rates as fixed by the Central Bank. Sec. 225. Depreciation Allowance for Machinery. RATE: max 5% of original cost/replacement cost/reproduction cost for every year of use Remaining value: FIXED at MIN 20% of original/replacement/reproduction cost so long as the machinery is useful and in operation

2. Collection of RPT Sec. 246. Date of Accrual of Tax. on the first (1st) day of January … from that date it shall constitute a lien on the property which shall be superior to any other lien, mortgage, or encumbrance of any kind whatsoever, and shall be extinguished only upon the payment of the delinquent tax. Sec. 247. Collection of Tax. responsibility of the city or municipal treasurer concerned …city/municipal treasurer may deputize brgy treasurer (collect taxes on RP located in brgy) + brgy treasurer PROPERLY BONDED + Premium on bond paid by city/municipal gov’t Sec. 248. Assessor to Furnish Local Treasurer with Assessment Roll. WHEN: on or before the thirty-first (31st) day of December each year CONTENTS: a. list of all persons whose real properties have been newly assessed or reassessed

b.

values of such properties

Sec. 249. Notice of Time for Collection of Tax. Whose duty: city/municipal treasurer WHEN:

a. b.

basic RPT + SEF: on or before the thirty-first day of January each year

b.

published in a newspaper of general circulation in the locality once a week for two (2) consecutive weeks

any other tax: on date prescribed by the sanggunian concerned WHAT: the notice of the dates when the tax may be paid without interest WHERE: a. at a conspicuous and publicly accessible place at the city or municipal hall

a. Payment in installments Sec. 250. Payment of Real Property Taxes in Installments. a. BASIC RPT + SEF: 4 equal installments (without interest) 1st: due and payable on or before Mar31 2nd: due and payable on or before June30 3rd: due and payable on or before Sept30

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4th: due and payable on or before Dec31 * 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. b. special levy, other tax: depends on the ordinance if it allows installments b. Condonation of Tax Sec. 276. Condonation or Reduction of Real Property Tax and Interest. WHEN: a. general failure of crops b. substantial decrease in the price of agricultural or agribased products c. calamity in any province, city, or municipality WHO: the sanggunian concerned HOW: by ordinance passed prior to the first (1st) day of January of any year + recommendation of the Local Disaster Coordinating Council -wholly or partially condone the taxes and interest for the succeeding year or years in the city or municipality affected by the calamity Sec. 277. Condonation or Reduction of Tax by the President of the Philippines. WHEN: when public interest so requires SCOPE: in any province or city or a municipality within the Metropolitan Manila Area. -any year rin… c. Reduction/Discount Sec. 251. Tax Discount for Advanced Prompt Payment. -paid RPT + SEF in advance -discount: max 20% of annual tax due

d.

REMEDIES

OF GOVERNMENT

to collect

Sec. 254. Notice of Delinquency in the Payment of the Real Property Tax. (a) RPT/any other tax became delinquent…. -provincial/city/municipal treasurer IMMEDIATELY CAUSE a notice of delinquency to be POSTED WHERE TO POST: i. at the main entrance of the provincial capito/city or municipal hall ; OR ii. a publicly accessible and conspicuous place in each barangay of the local government unit concerned; AND iii. published once a week for 2 consecutive weeks, in a newspaper of general circulation in the province/city/municipality. (b) CONTENTS: i. date upon which the tax became delinquent ii. personal property may be distrained to effect payment iii. (payment to stay public auction; sale in lieu thereof; right to redemption): any time before the distraint of personal property, payment of the tax + surcharges+ interests + 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, the delinquent

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REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. RP will be sold at public auction and title to property will be vested in purchaser, subject to right of redemption w/n 1yr from date of sale X: when notice of assessment/or special levy is contested administratively or judicially

REPORT of levying officer: …submitted to sanggunian …w/n 10d after receipt of the warrant BY OWNER/person having legal interest therein

Sec. 255. Interests on Unpaid Real Property Tax. …failed to pay the basic RPT or any other tax levied under this Title >upon the expiration of the periods as provided in Section 250 >when due Interest imposed: 2% pm on the unpaid amount or a fraction thereof, until the delinquent tax shall have been fully paid …TOTAL interest SHALL NOT EXCEED 36m

Sec. 259. Penalty for Failure to Issue and Execute Warrant. i. criminal prosecution ii. administrative iii. judicial proceding WHO liable: LOCAL TREASURER/DEPUTY FAILS For what: i. failure to issue warrant of levy w/n 1yr from time tax becomes due ii. failure to execute the warrant of levy w/n 30d from issuance iii. guilty of abusing exercise of power Consequence: DISMISSAL FROM SERVICE

Sec. 256. Remedies For The Collection Of Real Property Tax. a. levy on real property b. judicial action. Sec. 257. Local Government's Lien. -basic RPT and any other tax under the title constitute a lien on property subject to tax ….superior to all liens, charges or encumbrances in favor of any person …irrespective of the owner or possessor thereof …enforceable by administrative or judicial action …EXTINGUISH upon payment of the tax and the related interests and expenses. Sec. 258. Levy on Real Property. WHEN: After the expiration of the time required to pay the basic RPT or any other tax levied under this Title HOW: issuance of a warrant on/before/simultaneously with the institution of the civil action for the collection of the delinquent tax + duly authenticated certificate WHO issues: provincial/city treasurer, or treasurer of a municipality within the Metropolitan Manila Area CONTENTS of CERTIFICATE: i. name of the delinquent owner of the property/person having legal interest therein ii. the description of the property iii. the amount of the tax due iv. the interest thereon *warrant shall operate with the force of a legal execution throughout the province, city or a municipality within the Metropolitan Manila Area DELIVERY OF WARRANT: a. TO THE DELINQUENT OWNER/TAXPAYER i. mailed to /served upon the delinquent owner of the real property/person having legal interest therein ii. in case he is out of the country or cannot be located, the administrator or occupant of the property b. TO ASSESSOR and REGISTRAR OF DEEDS (w/ attached written notice of the levy) i. assessor annotate the levy on the tax declaration ii. registrar annotate the levy on the certificate of title of the property

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Sec. 260. Advertisement and Sale. WHEN: Within thirty (30) days after service of the warrant of levy WHO: the local treasurer HOW: a. ADVERTISEMENT WHERE: i. main entrance of the provincial/city/municipal building; and ii. publicly accessible and conspicuous place in the brgy where the real prop is located iii. publication once a week for 2 weeks (no consecutive?) in a newspaper of general circulation in the province/city/municipality CONTENTS OF ADVERTISEMENT: i. amount of delinquent tax ii. interest due iii. expenses of the sale iv. date and place of sale v. name of the owner of the real property/person having interest therein vi. description of the real property to be sold STAY OF SALE: owner of real property/person having legal interest therein PAY the delinquent tax + interest due + expenses of sale b. SALE WHERE: i. main entrance of the provincial/city/municipal building ii. on property to be sold iii. any other place as specified in the notice of the sale REPORT OF SALE: …by local treasurer/deputy …to sanggunian concerned …form part of local treasurer’s record CERTIFICATE OF SALE …by local treasurer …CONTENTS: i. name of purchaser ii. description of the property sold iii. amount of the delinquent tax

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REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. iv. interest due on tax v. expenses of sale vi. brief description of the proceedings PAG SOBRA PROCEEDS: remit to owner of prop/person having legal interest thereon ADVANCE on AMT OF COSTS OF COLLECTION: …by local treasurer …thru ordinance duly approved …includes costs of collection, advertisement, sale Sec. 261. Redemption of Property Sold. PERIOD: Within one (1) year from the date of sale BY WHOM: the owner of the delinquent real property/person having legal interest therein, or his representative HOW: payment to local treasurer of amt of delinquent tax + interest (not more than 2%pm on purchase price from date of sale to date of redemption) EFFECT: i. invalidate the certificate of sale issued to the purchaser

ii.

owner of the delinquent real property/person having legal interest therein shall be entitled to a certificate of redemption which shall be issued by the local treasurer or his deputy. iii. local treasurer return to purchaser the entire amount paid + interest max 2% pm; after: property shall be free from lien of tax + interest due + expenses of sale *DELINQUENT OWNER still remain in possession/entitled to income of fruits of the real prop from the date of sale until the expiration of the period of redemption Sec. 262. Final Deed to Purchaser. WHEN: Failure to redeem property HOW: local treasurer execute DEED CONVEYING TO PURCHASER PROPERTY FREE FROM LIEN OF DELINQUENT TAX, INTEREST, EXPENSES OF SALE …Deed briefly state the proceedings upon which the validity of the sale rests Sec. 263. Purchase of Property By the Local Government Units for Want of Bidder. In case there is no bidder for the real property advertised for sale as provided herein, or if the highest bid is for an amount insufficient to pay the real property tax and the related interest and costs of sale the local treasurer conducting the sale shall purchase the property in behalf of the local government unit concerned to satisfy the claim and within two (2) days thereafter shall make a report of his proceedings which shall be reflected upon the records of his office. It shall be the duty of the Registrar of Deeds concerned, upon registration with his office of any such declaration of forfeiture to transfer the title of the forfeited property to the local government unit concerned without the necessity of an order from a competent court. Within one (1) year from the date of such forfeiture, the taxpayer or any of his representative, may redeem the property by paying to the local treasurer the full amount of the real property tax and the related interest and the costs of sale. If the property is not redeemed as provided herein, the ownership thereof shall be fully vested on the local government unit concerned.

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Sec. 264. Resale of Real Estate Taken for Taxes, Fees, or Charges. The sanggunian concerned may, by ordinance duly approved and upon notice of not less than twenty (20) days, sell and dispose of the real property acquired under the preceding Section at public auction. The proceeds of the sale shall accrue to the general fund of the local government unit concerned. Sec. 265. Further Distraint or Levy. Levy may be repeated if necessary until the full amount due, including all expenses, is collected. Sec. 266. Collection of Real Property Tax Through the Courts. The local government unit concerned may enforce the collection of the basic real property tax or any other tax levied under this Title by civil action in any court of competent jurisdiction. The civil action shall be filed by the local treasurer within the period prescribed in Section 270 of this Code. Sec. 267. Action Assailing Validity of Tax Sale. …taxpayer deposit with court first the amount for which the real property was sold + interest 2%pm from date of sale to time of institution of action AMOUNT DEPOSITED: i. if deed is declared invalid: give to purchaser at the auction sale (dib a dapat government magsoli nun? Bakit kukunin kay taxpayer?) ii. if action fails: soli kay depositor/taxpayer …NO INVALIDITY OF PUBLIC AUCTION based on irregularities/informalities in proceedings UNLESS substantive rights of the delinquent owner of the real property/person having legal interest therein have been impaired Sec. 268. Payment of Delinquent Taxes on Property Subject of Controversy. ACTION: involves ownership/possession of/succession to real property AWARD How: motu propio/upon representationof the provincial/city/municipal treasurer/deputy What: ownership/possession/succession When: upon payment to the court of the taxes with interest due on the property and all other costs that may have accrued, subject to the final outcome of the action Sec. 269. What:

i.

Treasurer to Certify Delinquencies Remaining Uncollected.

certified list of all real property tax delinquencies which remained uncollected or unpaid for at least one (1) year in his jurisdiction

ii.

statement of the reason or reasons for such non-collection or nonpayment ..local treasurer submit to the sanggunian concerned …on or before the December 31 of the year immediately succeeding the year in which the delinquencies were incurred + request for assistance in the enforcement of the remedies for collection provided herein. Sec. 270.

Periods Within Which to Collect Real Property Taxes.

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REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. a.

Basic RPT and any other tax levied: within five (5) years from the date they become due. No action for the collection of the tax, whether administrative or judicial, shall be instituted after the expiration of such period.

b.

fraud or intent to evade payment of the tax: within ten (10) years from the discovery of such fraud or intent to evade payment. SUSPENSION OF PRESCRIPTIVE PERIOD: (1) The local treasurer is legally prevented from collecting the tax; (2) The owner of the property or the person having legal interest therein requests for reinvestigation and executes a waiver in writing before the expiration of the period within which to collect; and (3) The owner of the property or the person having legal interest therein is out of the country or otherwise cannot be located.

Sps. Ramon and Rosita Tan v. Bantegui NATURE The case is a Petition for Review under Rule 45 assailing the Decision and Resolution of the Court of Appeals FACTS F: Bantegui owns a property which was rented out to Sps Caedo. She left Philippines 1954 and returned 1988, executed her SPA in favor of her sister Guadalupe Bautista, and went back to US -1st sale: Taxes paid ONLY UNTIL 1977. Taxes from 1978- 1983 NOT PAID so CITY TREASURER SOLD at public auction the properties to Sps CAPISTRANO for P10k only. Certificate of Sale subsequently issued NOTE: no warrant to Bantegui of said delinquency, no notice of sale to Bantequi nor her representative -Property not redeemed w/n 1yr redemption period so TITLE CONSOLIDATED TO SPS CAPISTRANOS. Sps Capistranos NEVER took possessionof land, NEVER INFORMED Caedos about the sale, NEVER collected rent from Caedos nor PAID RPT on property -2nd Sale: Capistranos later sold to Sps Pereyra (daughter of the Caedos) for P60k. PEREYRAS DID NOT TAKE POSSESSION OF PROPERTY BUT MORTGAGED IT to Imus Rural Bank. Mortgaged annotated to title *TRANSFERS UNKNOWN TO Bantegui, Caedos, nor Bautista (rep) …Bantegui EVEN APPLIED for ADMINISTRATIVE RECONSTITUTION OF HER TITLE (lost in a fire) WHICH WAS GRANTED …EVEN paid RPT on property for 1987 to 1989. Her payment was only refused 1990 -3rd Sale: Pereyras to Sps Tan, Sps Tan paid P300k to Rural Bank of Imus, paid overdue taxes and other expenses. TAN ALSO DID NOT TAKE IMMEDIATE POSSESSION OF THE PROPERTY, ONLY INFORMED OCCUPANTS OF TITLE TO LAND in 1990 and then demanded Caedos to vacate property -Sps Tan filed action for ejectment, WON -Caedo appealed to CA, remanded by CA to TC: Caedos FAILED TO APPEAR so declared in default, was subsequently ejected from property, then their house on the property DEMOLISHED

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-Bantegui thru atty-in-fact Bautista + Caedos filed a complaint for annulment of sale + quieting of title + injunction + damages w/ RTC – they won! -Sps Tan appealed to CA; CA affirmed TC: Sps Tan WERE NOT PURCHASERS IN GF, NO BETTER RIGHT TO THE SUBJECT PROPERTY: (1) auction sale tainted with irregularities: NO Notice of delinquency + NO NOTICE OF SALE sent to Bantequi nor Bautista; (2) Owner continued to pay RPT even after sale; (3) Selling price inadequate + would render sale grossly inadequate, in itself would render sale VOID; (4) THEY NEVER took possession, paid RPT, informed lessees of title, never collected rent from Caedos H: AUCTION SALE VOID *NO DUE PROCESS: DID NOT FOLLOW STEPS PRESCRIBED BY LAW (PD 464, Real Property Tax Code), THUS, SALE IS INVALID 1. NO NOTICE OF DELINQUENCY, NO NOTICE OF SALE given to the delinquent owner nor representative Re: TCT: should have nevertheless be invalidated as failure to comply with the requirements of a proceeding in personam (thus would affect the rights of the real parties in interest), Sps Tan would have no better title than that of the original owner Re Gross inadequacy of price as means for delinquent owner to redeem property more easily: BUT delinquent owner was NEVER GIVEN OPPORTUNITY TO REDEEM THE PROPERTY! 2. ONLY PROOF to show validity of sale was RTC QC resolution confirming the final bill of sale of Capistranos (NO REPORT OF THE LOCAL TREASURER…) 3. Balance of the proceeds were never returned to Bantequi or Bautista (representative) after issuance of final bill of sale, SHOWING APPARENT IRREGULARITY NOT ONLY IN THE CONDUCT OF THE TAX SALE and SUBSEQUENT DISPOSITION 4. NOT INNOCENT PURCHASERS: no investigation despite awareness of defects in their title, NONE attempted to exercise possession, NONE paid RPT 5. Banteque remained in continuous possession of the owner’s copy of the CTC, even allowed to reconstitute title – and NO ATTEMPT TO HAVE THEM CANCELLED

B. Taxpayer’s Remedies 1. Contesting the assessment of land value Sec. 226. Local Board of Assessment Appeals. WHO: 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 WHEN: within sixty (60) days from the date of receipt of the written notice of assessment WHAT TO DO: appeal to the Board of Assessment Appeals (BAA) of the provincial or city HOW: 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. Sec. 227. Organization, Powers, Duties, and Functions of the Local Board of Assessment Appeals.

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REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. (a) COMPOSITION OF BAA: Registrar of Deeds (chairman) + Mems: the provincial/city prosecutor + the provincial/city engineer as members …serve in an ex officio capacity without additional compensation (b) The chairman of the Board shall have the power to designate any employee of the province or city to serve as secretary to the Board also without additional compensation. (c) The chairman and members of the Board of Assessment Appeals of the province or city shall assume their respective positions without need of further appointment or special designation immediately upon effectivity of this Code. They shall take an oath or affirmation of office in the prescribed form. (d) In provinces and cities without a provincial or city engineer, the district engineer shall serve as member of the Board. In the absence of the Registrar of Deeds, or the provincial or city prosecutor, or the provincial or city engineer, or the district engineer, the persons performing their duties, whether in an acting capacity or as a duly designated officer-in-charge, shall automatically become the chairman or member, respectively, of the said Board, as the case may be. Sec. 228. Meetings and Expenses of the Local Board of Assessment Appeals. (a) The Board of Assessment Appeals of the province or city shall meet once a month and as often as may be necessary for the prompt disposition of appealed cases. No member of the Board shall be entitled to per diems or traveling expenses for his attendance in Board meetings, except when conducting an ocular inspection in connection with a case under appeal. (b) All expenses of the Board shall be charged against the general fund of the province or city, as the case may be. The sanggunian concerned shall appropriate the necessary funds to enable the Board in their respective localities to operate effectively. Sec. 229. Action by the Local Board of Assessment Appeals. (a) The Board shall decide the appeal within one hundred twenty (120) days from the date of receipt of such appeal. The Board, after hearing, shall render its decision based on substantial evidence or such relevant evidence on record as a reasonable mind might accept as adequate to support the conclusion. (b) In the exercise of its appellate jurisdiction, the Board shall have the power to summon witnesses, administer oaths, conduct ocular inspection, take depositions, and issue subpoena and subpoena duces tecum. The proceedings of the Board shall be conducted solely for the purpose of ascertaining the facts without necessarily adhering to technical rules applicable in judicial proceedings. (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

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Assessment Appeals, as herein provided. The decision of the Central Board shall be final and executory. Sec. 230. Central Board of Assessment Appeals. The Central Board of Assessment Appeals shall be composed of a chairman and two (2) members to be appointed by the President, who shall serve for a term of seven (7) years, without reappointment. Of those first appointed, the chairman shall hold office for seven (7) years, one member for five (5) years, and the other member for three (3) years. Appointment to any vacancy shall be only for the unexpired portion of the term of the predecessor. In no case shall any member be appointed or designated in a temporary or acting capacity. The chairman and the members of the Board shall be Filipino citizens, at least forty (40) years old at the time of their appointment, and members of the Bar or Certified Public Accountants for at least ten (10) years immediately preceding their appointment. The chairman of the Board of Assessment Appeals shall have the salary grade equivalent to the rank of Director III under the Salary Standardization Law exclusive of allowances and other emoluments. The members of the Board shall have the salary grade equivalent to the rank of Director II under the Salary Standardization Law exclusive of allowances and other emoluments. The Board shall have appellate jurisdiction over all assessment cases decided by the Local Board of Assessment Appeals. There shall be Hearing Officers to be appointed by the Central Board of Assessment Appeals pursuant to civil service laws, rules and regulations, one each for Luzon, Visayas and Mindanao, who shall hold office in Manila, Cebu City and Cagayan de Oro City, respectively, and who shall serve for a term of six (6) years, without reappointment until their successors have been appointed and qualified. The Hearing Officers shall have the same qualifications as that of the Judges of the Municipal Trial Courts. The Hearing Officers shall each have the salary grade equivalent to the rank of Director I under the Salary Standardization Law exclusive of allowances and other emoluments. The Hearing Officers shall try and receive evidences on the appealed assessment cases as may be directed by the Board. The Central Board of Assessment Appeals, in the performance of its powers and duties, may establish and organize staffs, offices, units, prescribe the titles, functions and duties of their members and adopt its own rules and regulations. Unless otherwise provided by law, the annual appropriations for the Central Board of Assessment Appeals shall be included in the annual budget of the Department of Finance in the corresponding General Appropriations Act. Sec. 231. Effect of Appeal on the Payment of Real Property Tax. Appeal on assessments of real property made under the provisions of this Code shall, in no case, suspend the collection of the corresponding realty taxes on the property involved as assessed by the provincial or city assessor, without prejudice to subsequent adjustment depending upon the final outcome of the appeal. a.

Appeal to the Local board of Assessment Appeals (LBAA)

Systems Plus Computer College v. Caloocan City FACTS

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REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. - Systems Plus Computer College is a non-stock and non-profit educational institution organized and established in 1997. As such, it enjoys property tax exemption from the local government on its buildings but not on the parcels of land which Systems Plus is renting for P5,000 monthly from its sister companies, Consolidated Assembly and Pair Management and Development Corporation. - Systems Plus requested Caloocan city government to extend tax exemption to the parcels of land claiming that the same were being used actually, directly and exclusively for educational purposes. - City government denied the request on the ground that the subject parcels of land were owned by Consolidated Assembly and Pair Management which derived income therefrom in the form of rentals and other local taxes assumed by the Systems Plus. - Systems Plus and the Consolidated Assembly and Pair Management entered into separate agreements which in effect novated their existing contracts of lease on the subject parcels of land and converted them to donations of the beneficial use thereof. - Systems Plus wrote City Assessor informing the latter of the new agreements and seeking a reconsideration of earlier denial of the application for tax exemption. They no longer received income by way of rentals from the subject properties, accompanied by the corresponding board resolutions, Again, the application was denied. - Systems Plus filed a petition for mandamus with RTC which, however, dismissed it for being premature. Its timely motion for reconsideration having been denied, Systems Plus filed the instant petition for certiorari imputing grave abuse of discretion on the part of the trial court when it ruled: (1) that mandamus does not lie and (2) that Systems Plus failed to exhaust available administrative remedies. ISSUE WON mandamus is the proper remedy HELD NO. Under Section 226 of RA 7160,[12] 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. - The Systems Plus 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. - Before seeking the intervention of the courts, it is a precondition that Systems Plus should first avail of all the means afforded by the administrative processes. - Besides, 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. - 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. b.

Appeal to the Central Board of Assessment Appeals (CBAA)

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Caltex v. CBAP FACTS - Caltex was assessed realty tax on machinery & equipment installed in its gas stations on leased lands. (underground tanks, elevanted tanks, elevated water tanks, water tanks, gasoline pumps, etc.) - Those are loaned by Caltex to gas station operators under lease agreement. The operators must return them. The lessor of the land doesn’t become the owner of the machines & equipment. - City Assessor of Pasay said those are taxable realty. City Board of Tax Appeals said they’re personalty. - Assessor appealed to Central Board of Assessment Appeals. - Central Board of Assessment Appeals said they’re real prop. - Caltex filed this certiorari petition. - The Solicitor General contends that the CTA has exclusive appellate jurisdiction over the case. and hence ISSUE 1. WON CTA has exclusive jurisdiction 2. WON the equipment / machineries are real or personal property HELD 1. No. The Solicitor General's contention that the Court of Tax Appeals has exclusive appellate jurisdiction over this case is not correct. \A hen Republic Act No. 1125 created the Tax Court in 1954, there was as yet no Central Board of Assessment Appeals. Section 7(3) of that law in providing that the Tax Court had jurisdiction to review by appeal decisions of provincial or city boards of assessment appeals had in mind the local boards of assessment appeals but not the Central Board of Assessment Appeals which under the Real Property Tax Code has appellate jurisdiction over decisions of the said local boards of assessment appeals and is, therefore, in the same category as the Tax Court. Section 36 of the Real Property Tax Code provides that the decision of the Central Board of Assessment Appeals shall become final and executory after the lapse of fifteen days from the receipt of its decision by the appellant, Within that fifteen-day period, a petition for reconsideration may be filed. The Code does not provide for the review of the Board's decision by this Court. Consequently, the only remedy available for seeking a review by this Court of the decision of the Central Board of Assessment Appeals is the special civil action of certiorari, the recourse resorted to herein by Caltex (Philippines), Inc. 2.REAL PROP - bec as appurtenances to the gas station, they’re necessary to the operation of the gas station. - bec improvements on land are commonly taxed as realty even though for some purposes they might be considered personalty. Standard Oil v. Jaramillo

Chavez v. Ongpin

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REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. NATURE Petition seeking to declare unconstitutional EO 73 FACTS - EO 73 (November 25, 1986) which provided for collection of real property taxes based on 1984 real property values, under section 21 of the real property tax code as amended WHEREAS - collection of real property taxes is still based on the 1978 revision of property values - latest general revision of real property assessments completed in 1984 has rendered the 1978 revised values obsolete - collection of real property taxes based on the 1984 real property values was deferred to take effect on January 1, 1988 instead of January 1, 1986, thus depriving the local government units of an additional source of revenue - urgent need for local governments to augment their financial resources to meet the rising cost of rendering effective services to the people DO HEREBY ORDER (1) Real property values as of December 31, 1984 as determined by the local assessors during the latest general revision of assessments shall take effect beginning January 1, 1987 for purposes of real property tax collection - MEMO ORDER 77 issued suspending implementation of EO 73 until June 30, 1987 - Chavez (taxpayer and owner of 3 parcels of land) alleges > EO 73 accelerated the application of the general revision of assessments to January 1, 1987 thereby mandating excessive increase in real property taxes by 100% to 400% on improvements and up to 100% on land > any increase in the value of real property brought about by the revision of real property values and assessments would necessarily lead to a proportionate increase in real property taxes > sheer oppression is the result of increasing real property taxes at a period of time when harsh economic conditions prevail > increase in the market values of real property as reflected in the schedule of values was brought about only by inflation and economic recession - Realty Owners Association of the Philippines, Inc. (ROAP) (national association of owners-lessors) joins Chavez and additionally alleges > PD 464 is unconstitutional as it imposes an additional one percent (1%) tax on all property owners to raise funds for education, as real property tax is admittedly a local tax for local governments > General Revision of Assessments does not meet the requirements of due process as regards publication, notice of hearing, opportunity to be heard as it authorizes "replacement cost" of buildings (improvements) which is not provided in PD 464, but only in an administrative regulation of the Department of Finance > Joint Local Assessment/Treasury Regulations No. 2-86 is even more oppressive and unconstitutional as it imposes successive increase of 150% over the 1986 tax ISSUE WON EO 73 is unconstitutional as regards the revision of the assessments and effectivity thereof HELD NO

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- no legal basis on attacking EO 73 since the general revision of assessments is a continuing process mandated by PD 464 Sec 21 (make a general revision of real property assessments once every five years and if property values greatly change, with approval of Sec Fin, make gen revision before the fifth year). - Furthermore, PD 464 furnishes the PROCEDURE BY WHICH A TAX ASSESSMENT MAY BE QUESTIONED 1) Within 60 days from the date of receipt of the written notice of assessment, any owner who doubts the assessment of his property, may appeal to the Local Board of Assessment Appeals with petition under oath, copies of the tax declarations and documents in support of the appeal (Sec 30). Decision shall be made within 120 days from receipt of appeal (Sec 34). 2) In case the owner or administrator of the property or the assessor is not satisfied with the decision of the Local Board of Assessment Appeals, he may, within 30 days from the receipt of the decision, appeal to the Central Board of Assessment Appeals (Sec 34) 3) The Central Board will decide within 12 months from date of receipt.The decision of the Central Board of Assessment Appeals shall become final and executory after the lapse of 15 days from the date of receipt of the decision (Sec 36). - without EO 73, the basis for collection of real property taxes will still be the 1978 revision of property values. Certainly, to continue collecting real property taxes based on valuations arrived at several years ago, in disregard of the increases in the value of real properties that have occurred since then, is not in consonance with a sound tax system. Fiscal adequacy, which is one of the characteristics of a sound tax system, requires that sources of revenues must be adequate to meet government expenditures and their variations. Disposition Petition DISMISSED

Cagayan Robina Sugar Milling v. CA NATURE Petition for certiorari decision of CA (dismissing petition for certiorari of Cagayan Robina) FACTS - Cagayan Robina Sugar Milling (Robina for short) was the highest bidder for the properties of Cagayan Sugar Milling, whose properties were foreclosed and held for auction by the Asset Privitization Trust (APT). APT set floor bid price at P355million. Robina acquired the properties for P464million. Among the properties acquired were machineries located in the millsite of Cagayan Milling - shortly after, the provincial assessor sent a notice of assessment of real property to Robina, covering the machineries installed in the millsite, based on the market value of P391.6m and assessed value of P313.3m - Robina appealed to the LBAA, contending that the assessment should not be based on the APT-set floor bid price alone, but should also consider other pricing factors like goodwill and future business potential. - LBAA affirmed the assessment of the provincial assessor, but modified the amount (it used the APT-set floor bid price then deducted the value of all other properties not covered by the assessment) to market value of P260m and assessed value of P208m. Resolution was given April 1, 1992, and given to Robina on April 18, 1992. - Robina then prepared an appeal to the CBAA, but it was only on November 1992 that the same was filed in the CBAA. Naturally, the LBAA and provincial assessor moved to dismiss for being time-barred (past the 30-day period for appeal to CBAA).

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REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. CBAA dismissed - Robina filed (actually with SC, but SC referred to CA) a petition on certiorari against CBAA. CA upheld the dismissal and denied the petition. Hence, the present petition ISSUE 1. WON there was any error in dismissing the appeal of Robina HELD 1. NO Ratio Robina failed to show that the use by the LBAA and CBAA of the APT floor bid price, pursuant to Sec.3(n) of the RPTC was incorrect and done in bad faith. The method used by the LBAA and CBAA cannot be deemed erroneous since there is no rigid rule for the valuation of property, which is affected by a multitude of circumstances and which rules could not foresee nor provide for. LBAA and CBAA were not precluded from adopting various approaches to value determination, including adopting the APT “floor bid price” for Robina’s properties. Further, the appeal was time-barred Reasoning Note that the real property tax being assessed and collected here is for 1990. Hence, the applicable law is the Real Property Tax Code (PD464), and not the Local Government Code (RA7160). -the main contention of Robina is that the method by which the LBAA arrived at the assessment is not sanctioned by law, insofar as the RPTC provides a formula for reaching market value of machineries, viz: (remaining economic value/ economic life) x replacement cost (sec. 28, RPTC) - however, sec.28 must be read in consonance with sec.3(n) of RPTC, which defines “market value”. Here, LBAA and CBAA are not precluded from adopting various approaches to value determination, including adopting the APT "floor bid price" for the properties - Valuation on the basis of a floor bid price is not bereft of any basis in law. One of the approaches to value is the Sales Analysis Approach or the Market Data Approach where the source of market data for valuation is from offer of sales or bids of real property. Valuation based on the floor bid price belongs to this approach, pursuant to Section 3(n)… - Worthy of note, Robina has not shown that the current market value of its properties would be significantly lower if its proposed formula is adopted. A party challenging an appraiser's finding of value is required not only to prove that the appraised value is erroneous but also what the proper value is. - further, the appeal to the CBAA was time-barred. The RPTC provides: “Where the owner or administrator of a property or an assessor is not satisfied with the decision of the LBAA, he may, within 30days from the receipt of the decision, appeal to the CBAA. - Robina had only until May 18, 1992, to appeal the local board's resolution to the CBAA. However, it only filed its appeal with the CBAA on November 25, 1992, way beyond the period to perfect an appeal. No error was committed by CBAA when it dismissed petitioner's appeal for having been filed out of time and CA was correct in affirming the dismissal. - Robina contends that the appeal period doesn’t apply in this case because of the rule that an assessment of a provincial assessor that is void ab initio, the prescriptive period to appeal to the LBAA is suspended. However, this argument is off-tangent as the appeal found to be time-barred in this case is the appeal to the CBAA, not to the LBAA.

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- 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. Disposition Petition is denied. Decision affirmed

2. Payment of RPT under Protest 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 thesixty-day period prescribed in subparagraph (a), the taxpayer may avail of the remedies as provided for in Chapter 3, Title Two, Book II of this Code.

Manila Electric Company v. Barlis FACTS: -MERALCO erected four (4) power generating plants in Sucat, Muntinlupa which it declared in its tax declarations including the buildings thereon and the machineries and equipment therein. 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. MERALCO sold all the power-generating plants including the landsite to the NAPOCOR. -In 1985, the Offices of the Municipal Assessor and Municipal Treasurer of Muntinlupa discovered, that MERALCO, for the period beginning 1 January 1976 to 29 December 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. These machineries were reflected in the Deed of Sale. -The Municipal Assessor of Muntinlupa then declared and assessed the subject real properties for taxation purposes .. The Municipal Treasurer of Muntinlupa issued several collection notices to MERALCO, ordering it to pay the deficiency in the real property taxes covering the machineries and equipment found in the said power plants. MERALCO did not pay. -BLGF-DOF conducted a number of hearings with both MERALCO and the Municipality of Muntinlupa participating and issued a Letter-Endorsement declaring MERALCO liable to pay the deficiency or delinquent real property taxes claimed by the Municipality. -Municipal Treasurer Eduardo A. Alon forwarded a supplemental collection notice to MERALCO demanding the immediate payment of 36 Million pesos of unpaid real property taxes inclusive of penalties and accrued interest. In addition, Municipal Treasurer Alon also sent a formal letter to MERALCO reiterating his demand for tax payment. Again, MERALCO did not pay.

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REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. -Accordingly, after issuing the requisite certification of non-payment of real property taxes and complying with the additional requirement of public posting of the notice of delinquency, Municipal Treasurer Eduardo A. Alon issued warrants of garnishment, copies of which were served on MERALCO on 10 October 1990, ordering the attachment of the bank deposits of MERALCO with the Philippine Commercial and Industrial Bank (PCIB), Metropolitan Bank and Trust Company (METROBANK) and the Bank of the Philippine Islands (BPI) to the extent of its unpaid real property taxes. -MERALCO filed before the RTC of Makati, Metro Manila 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. -RTC issued a TRO which was modified to the effect that the warrants of garnishment against the bank accounts shall be in full force and effect, provided, that the Municipal Treasurer shall not in the meantime collect, receive or withdraw the frozen bank deposits; and that MERALCO can withdraw from the frozen deposits provided that it does not leave a balance less than the tax claim of the Municipality of Muntinlupa. -Municipal Treasurer filed a Motion to Dismiss on the grounds of: (1) lack of jurisdiction since, under Sec. 64 of the Real Property Tax Code, courts are prohibited from entertaining any suit assailing the validity of a tax assessed thereunder until the taxpayer shall gave paid, under protest, the tax assessed against him ISSUE: WON RTC has jurisdiction over a petition for prohibition which seeks to set aside the warrants of garnishment over the bank deposits of petitioner MERALCO without payment under protest of the tax assessed as required in Sec. 64 of the Real Property Tax Code HELD: No. The trial court has no jurisdiction to entertain a Petition for Prohibition absent petitioner's payment, under protest, of the tax assessed as required by Sec. 64 of the RPTC. Payment of the tax assessed under protest, is a condition sine qua non before the trial court could assume jurisdiction over the petition and failure to do so, the RTC has no jurisdiction to entertain it. The restriction upon the power of courts to impeach tax assessment without a prior payment, under protest, of the taxes assessed is consistent with the doctrine that taxes are the lifeblood of the nation and as such their collection cannot be curtailed by injunction or any like action; otherwise, the state or, in this case, the local government unit, shall be crippled in dispensing the needed services to the people, and its machinery gravely disabled.

Emerlinda Talento v. Escalada and Petron NATURE Certiorari under Rule 65 of the Rules of Court assailing the November 5, 2007 Order of the Regional Trial Court of Bataan, Branch 3 granting the petition for the issuance of a writ of preliminary injunction in favor of Petron FACTS

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On June 18, 2007, Petron received from the Provincial Assessor’s Office of Bataan a notice of revised assessment over its machineries and pieces of equipment in Lamao, Limay, Bataan. Petron was given a period of 60 days within which to file an appeal with the Local Board of Assessment Appeals (LBAA). Based on said revised assessment, petitioner Provincial Treasurer of Bataan issued a notice informing Petron that as of June 30, 2007, its total liability is P1,731,025,403.06, representing deficiency real property tax due from 1994 up to the first and second quarters of 2007. On August 17, 2007, Petron filed a petition with the LBAA contesting the revised assessment on the grounds that (1) the subject assessment pertained to properties that have been previously declared; (2) and that the assessment covered periods of more than 10 years which is not allowed under the Local Government Code (LGC). According to Petron, the possible valid assessment pursuant to Section 222 of the LGC could only be for the years 1997 to 2006. Petron further contended that the fair market value or replacement cost used by petitioner included items which should be properly excluded; that prompt payment of discounts were not considered in determining the fair market value; and that the subject assessment should take effect a year after or on January 1, 2008. In the same petition, Petron sought the approval of a surety bond in the amount of P1,286,057,899.54. On August 22, 2007, Petron received from petitioner a final notice of delinquent real property tax with a warning that the subject properties would be levied and auctioned should Petron fail to settle the revised assessment due. Consequently, Petron sent a letter to petitioner stating that in view of the pendency of its appeal with the LBAA, any action by the Treasurer’s Office on the subject properties would be premature. However, petitioner replied that only Petron’s payment under protest shall bar the collection of the realty taxes due, pursuant to Sections 231 and 252 of the LGC. With the issuance of a Warrant of Levy against its machineries and pieces of equipment, Petron filed on September 24, 2007, an urgent motion to lift the final notice of delinquent real property tax and warrant of levy with the LBAA. It argued that the issuance of the notice and warrant is premature because an appeal has been filed with the LBAA, where it posted a surety bond in the amount of P1,286,057,899.54. On October 3, 2007, Petron received a notice of sale of its properties scheduled on October 17, 2007. Consequently, on October 8, 2007, Petron withdrew its motion to lift the final notice of delinquent real property tax and warrant of levy with the LBAA. On even date, Petron filed with the Regional Trial Court of Bataan the instant case for prohibition with prayer for the issuance of a temporary restraining order (TRO) and preliminary injunction.

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REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. On October 15, 2007, the trial court issued a TRO for 20 days enjoining petitioner from proceeding with the public auction of Petron’s properties. Petitioner thereafter filed an urgent motion for the immediate dissolution of the TRO, followed by a motion to dismiss Petron’s petition for prohibition. On November 5, 2007, the trial court issued the assailed Order granting Petron’s petition for issuance of writ of preliminary injunction, subject to Petron’s posting of a P444,967,503.52 bond in addition to its previously posted surety bond of P1,286,057,899.54, to complete the total amount equivalent to the revised assessment of P1,731,025,403.06. The trial court held that in scheduling the sale of the properties despite the pendency of Petron’s appeal and posting of the surety bond with the LBAA, petitioner deprived Petron of the right to appeal. Hence, this direct recourse to the SC. ISSUE 1. Whether or not the petitioner properly invoked Rule 65 on certiorari (note that this case is already under the remedies part of our outline). 2. Whether or not preliminary injunction was properly granted in light of the settled rule that taxes are the lifeblood of the nation, hence the immediacy of timely and speedy collection. 3. Whether or not the remedies availed of by Petron have statutory basis. RULING 1. NO, since this involves purely a question of law, the proper vehicle would be petition for review on certiorari under Rule 45. RATIO Rule 65 is an independent action that cannot be availed of as a substitute for the lost remedy of an ordinary appeal, including that under Rule 45, especially if such loss or lapse was occasioned by one’s own neglect or error in the choice of remedies. REASONING In the instant case, petitioner received the questioned order of the trial court on November 6, 2007, hence, she had only up to November 21, 2007 to file the petition. However, the same was filed only on January 4, 2008, or 43 days late. Consequently, petitioner’s failure to file an appeal within the reglementary period rendered the order of the trial court final and executory. The perfection of an appeal in the manner and within the period prescribed by law is mandatory. Failure to conform to the rules regarding appeal will render the judgment final and executory and beyond the power of the Court’s review. Jurisprudence mandates that when a decision becomes final and executory, it becomes valid and binding upon the parties and their successors in

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interest. Such decision or order can no longer be disturbed or reopened no matter how erroneous it may have been. Petitioner’s resort to a petition under Rule 65 is obviously a play to make up for the loss of the right to file an appeal via a petition under Rule 45. However, a special civil action under Rule 65 can not cure petitioner’s failure to timely file a petition for review on certiorari under Rule 45 of the Rules of Court. Rule 65 is an independent action that cannot be availed of as a substitute for the lost remedy of an ordinary appeal, including that under Rule 45, especially if such loss or lapse was occasioned by one’s own neglect or error in the choice of remedies. Moreover, even if we assume that a petition under Rule 65 is the proper remedy, the petition is still dismissible. We note that NO MOTION FOR RECONSIDERATION OF THE NOVEMBER 5, 2007 ORDER OF THE TRIAL COURT WAS FILED PRIOR TO THE FILING OF THE INSTANT PETITION. The settled rule is that a motion for reconsideration is a sine qua non condition for the filing of a petition for certiorari. The purpose is to grant the public respondent an opportunity to correct any actual or perceived error attributed to it by the re-examination of the legal and factual circumstances of the case. Petitioner’s failure to file a motion for reconsideration deprived the trial court of the opportunity to rectify an error unwittingly committed or to vindicate itself of an act unfairly imputed. Besides, a motion for reconsideration under the present circumstances is the plain, speedy and adequate remedy to the adverse judgment of the trial court. Petitioner also blatantly disregarded the rule on hierarchy of courts. Although the Supreme Court, Regional Trial Courts, and the Court of Appeals have concurrent jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction, such concurrence does not give the petitioner unrestricted freedom of choice of court forum. Recourse should have been made first with the Court of Appeals and not directly to this Court. 2. YES RATIO The requisites for the issuance of a writ of preliminary injunction were met (1) the existence of a clear and unmistakable right that must be protected; and (2) an urgent and paramount necessity for the writ to prevent serious damage. REASONING The urgency and paramount necessity for the issuance of a writ of injunction becomes relevant in the instant case considering that what is being enjoined is the sale by public auction of the properties of Petron amounting to at least P1.7 billion and which properties are vital to its business operations. If at all, the repercussions and far-reaching implications of the sale of these properties on the operations of Petron merit the issuance of a writ of preliminary injunction in its favor.

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REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. We are not unaware of the doctrine that taxes are the lifeblood of the government, without which it can not properly perform its functions; and that appeal shall not suspend the collection of realty taxes. However, there is an exception to the foregoing rule, i.e., where the taxpayer has shown a clear and unmistakable right to refuse or to hold in abeyance the payment of taxes. In the instant case, we note that respondent contested the revised assessment on the following grounds: that the subject assessment pertained to properties that have been previously declared; that the assessment covered periods of more than 10 years which is not allowed under the LGC; that the fair market value or replacement cost used by petitioner included items which should be properly excluded; that prompt payment of discounts were not considered in determining the fair market value; and that the subject assessment should take effect a year after or on January 1, 2008. To our mind, the resolution of these issues would have a direct bearing on the assessment made by petitioner. Hence, it is necessary that the issues must first be passed upon before the properties of respondent is sold in public auction. 3. YES RATIO Although generally, appeal does not suspend payment, levy, distraint or sale of property to satisfy tax liability, the law empowers our courts at any stage of the processing to suspend the collection and require the taxpayer either to deposit the amount claimed or to file a surety bond for not more than double the amount with the Court. THE GROUND TO BE INVOKED IS THAT THE COLLECTION BY GOVERNMENT AGENCIES MAY JEOPARDIZE THE INTEREST OF THE GOVERNMENT AND/OR THE TAXPAYER REASONING

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(3) the amount of the bond in excess of the surety company’s writing capacity, if any, must be covered by Reinsurance Binder, in which case, a certification to this effect must likewise accompany the surety bond. Corollarily, Section 11 of Republic Act No. 9282,] which amended Republic Act No. 1125 (The Law Creating the Court of Tax Appeals) provides: Section 11. Who may Appeal; Mode of Appeal; Effect of Appeal; xxxx No appeal taken to the Court of Appeals from the Collector of Internal Revenue x x x shall suspend the payment, levy, distraint, and/or sale of any property for the satisfaction of his tax liability as provided by existing law. PROVIDED, HOWEVER, THAT WHEN IN THE OPINION OF THE COURT THE COLLECTION BY THE AFOREMENTIONED GOVERNMENT AGENCIES MAY JEOPARDIZE THE INTEREST OF THE GOVERNMENT AND/OR THE TAXPAYER the Court at any stage of the processing may suspend the collection and require the taxpayer either to deposit the amount claimed or to file a surety bond for not more than double the amount with the Court. a. b.

File protest with the local treasurer Protest to be filed with the LBAA: W/n 60d from receipts of assessment; 120d to decide

City Gov’t of QC v. Bayantel NATURE Petition for review on certiorari

The Rules of Procedure of the LBAA, particularly Section 7, Rule V thereof, provides:

FACTS

Section 7. Effect of Appeal on Collection of Taxes. – An appeal shall not suspend the collection of the corresponding realty taxes on the real property subject of the appeal as assessed by the Provincial, City or Municipal Assessor, without prejudice to the subsequent adjustment depending upon the outcome of the appeal. AN APPEAL MAY BE ENTERTAINED BUT THE HEARING THEREOF SHALL BE DEFERRED UNTIL THE CORRESPONDING TAXES DUE ON THE REAL PROPERTY SUBJECT OF THE APPEAL SHALL HAVE BEEN PAID UNDER PROTEST OR THE PETITIONER SHALL HAVE GIVEN A SURETY BOND, subject to the following conditions:

-Bayan Telecommunications, Inc. (Bayantel) is a legislative franchise holder under Republic Act (Rep. Act) No. 32594 to establish and operate radio stations for domestic telecommunications, radiophone, broadcasting and telecasting. Rep. Act No. 3259, embodied in Section 14 thereof, states: “(a) The grantee shall be liable to pay the same taxes on its real estate, buildings and personal property, exclusive of the franchise, as other persons or corporations are now or hereafter may be required by law to pay. …..”

(1) the amount of the bond must not be less than the total realty taxes and penalties due as assessed by the assessor nor more than double said amount; (2) the bond must be accompanied by a certification from the Insurance Commissioner (a) that the surety is duly authorized to issue such bond; (a) that the surety bond is approved by and registered with said Commission; and (c) that the amount covered by the surety bond is within the writing capacity of the surety company; and

- On January 1, 1992, Rep. Act No. 7160, otherwise known as the "Local Government Code of 1991" (LGC), took effect. Section 232 of the Code grants local government units within the Metro Manila Area the power to levy tax on real properties: …. “Except as provided herein, any exemption from payment of real property tax previously granted to, or enjoyed by, all persons, whether natural or juridical, including government-owned-or-controlled corporations is hereby withdrawn upon effectivity of this Code”

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REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. On July 20, 1992, barely few months after the LGC took effect, Congress enacted Rep. Act No. 7633, amending Bayantel’s original franchise. The amendatory law (Rep. Act No. 7633) contained the following tax provision: SEC. 11. The grantee, its successors or assigns shall be liable to pay the same taxes on their real estate, buildings and personal property, exclusive of this franchise, as other persons or corporations are now or hereafter may be required by law to pay…. In addition thereto, the grantee, its successors or assigns shall pay a franchise tax equivalent to three percent (3%) of all gross receipts of the telephone or other telecommunications businesses transacted under this franchise by the grantee, its successors or assigns and the said percentage shall be in lieu of all taxes on this franchise or earnings thereof. Provided, That the grantee, its successors or assigns shall continue to be liable for income taxes payable under Title II of the National Internal Revenue Code It is undisputed that within the territorial boundary of Quezon City, Bayantel owned several real properties on which it maintained various telecommunications facilities. In 1993, the government of Quezon City, pursuant to the taxing power vested on local government units by Section 5, Article X of the 1987 Constitution, , enacted the Quezon City Revenue Code (QCRC),5 imposing, under Section 5 thereof, a real property tax on all real properties in Quezon City. Furthermore, much like the LGC, the QCRC, under its Section 230, withdrew tax exemption privileges in general New tax declarations for Bayantel were given. Meanwhile, on March 16, 1995, Rep. Act No. 7925,6 otherwise known as the "Public Telecommunications Policy Act of the Philippines," envisaged to level the playing field among telecommunications companies, took effect. On January 7, 1999, Bayantel wrote the office of the City Assessor seeking the exclusion of its real properties in the city from the roll of taxable real properties. With its request having been denied, Bayantel interposed an appeal with the Local Board of Assessment Appeals (LBAA). And, evidently on its firm belief of its exempt status, Bayantel did not pay the real property taxes assessed against it by the Quezon City government. On account thereof, the Quezon City Treasurer sent out notices of delinquency for the total amount of P43,878,208.18, followed by the issuance of several warrants of levy against Bayantel’s properties preparatory to their sale at a public auction set on July 30, 2002. Threatened with the imminent loss of its properties, Bayantel immediately withdrew its appeal with the LBAA and instead filed with the RTC of Quezon City a petition for prohibition with an urgent application for a temporary restraining order (TRO) and/or writ of preliminary injunction, thereat docketed as Civil Case No. Q-02-47292, which was raffled to Branch 227 of the court. On July 29, 2002, or in the eve of the public auction scheduled the following day, the lower court issued a TRO, followed, after due hearing, by a writ of preliminary

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injunction via its order of August 20, 2002. The lower court declared the real properties exempt from taxation after hearing the merits. MFR was denied. ISSUE Whether or not Bayantel is required to exhaust administrative remedies before seeking judicial relief with the trial court. HELD NO RATIO Petitions for prohibition are governed by the following provision of Rule 65 of the Rules of Court: SEC. 2. Petition for prohibition. When the proceedings of any tribunal, are without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered commanding the respondent to desist from further proceedings in the action or matter specified therein, or otherwise, granting such incidental reliefs as law and justice may require. With the reality that Bayantel’s real properties were already levied upon on account of its nonpayment of real estate taxes thereon, the Court agrees with Bayantel that an appeal to the LBAA is not a speedy and adequate remedy within the context of the aforequoted Section 2 of Rule 65. This is not to mention of the auction sale of said properties already scheduled on July 30, 2002. Moreover, one of the recognized exceptions to the exhaustion- of-administrative remedies rule is when, as here, only legal issues are to be resolved. In fact, the Court, cognizant of the nature of the questions presently involved, gave due course to the instant petition. As the Court has said in Ty vs. Trampe:7 xxx. 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. xxx. Lest it be overlooked, an appeal to the LBAA, to be properly considered, required prior payment under protest of the amount of P43,878,208.18, a figure which, in the light of the then prevailing Asian financial crisis, may have been difficult to raise up. Given this reality, an appeal to the LBAA may not be considered as a plain, speedy and adequate remedy. It is thus understandable

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REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC. REMEDIES UNDER LGC.

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why Bayantel opted to withdraw its earlier appeal with the LBAA and, instead, filed its petition for prohibition with urgent application for injunctive relief in Civil Case No. Q-02-47292. The remedy availed of by Bayantel under Section 2, Rule 65 of the Rules of Court must be upheld.

California Manufacturing Co. v. City of Las Pinas, supra. NPC v. CBA, LBAA of La Union c. d. e.

Appeal to the CBAA: W/n 30d from receipt of denial Appeal to the CTA Appeal to the SC

3. Claim for refund of RPT paid Sec. 253. Repayment of Excessive Collections. When an assessment of basic real property tax, or any other tax levied under this Title, is found to be illegal or erroneous and the tax is accordingly reduced or adjusted, the taxpayer may file a written claim for refund or credit for taxes and interests with the provincial or city treasurer within two (2) years from the date the taxpayer is entitled to such reduction or adjustment. The provincial or city treasurer shall decide the claim for tax refund or credit within sixty (60) days from receipt thereof. In case the claim for tax refund or credit is denied, the taxpayer may avail of the remedies as provided in Chapter 3, Title Two, Book II of this Code.

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