Rpt Cases.docx

Real Property Taxation 1. BELEN C. FIGUERRES VS. COURT OF APPEALS, CITY OF ASSESSORS OF MANDALUYONG, CITY TREASURER OF MANDALUYONG, and SANGGUNIANG BAYAN OF MANDALUYONG Facts: Belen C. Figuerres is the owner of a parcel of land located at Amarillo Street, Barangay Mauway, City of Mandaluyong. In 1993, she received a notice of assessment from the municipal assessor of the Municipality of Mandaluyong. The assessment was based on a number of ordinances issued by 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. Finally, Ordinance No. 135 amended Ordinance No. 119, 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. Figuerres brought a prohibition suit in the CA against the Assessor, the Treasurer, and the Sangguniang Bayan to stop them from enforcing the ordinances in question on the ground that the ordinances were invalid for having been adopted allegedly without public hearings and prior publication or posting and without complying with the implementing rules yet to be issued by the Department of Finance. CA dismissed the petition stating that the approval and determination by the Department of Finance is not needed under the Local Government Code of 1991, since it is now the city council of Mandaluyong that is empowered to determine and approve the aforecited ordinances. Furthermore, the Finance Local Assessment Regulation No. 192 provides for the rules relative to the conduct of general revisions of real property assessments pursuant to Sections 201 and 219 of the Local Government Code of 1991.

Hence, after the proposed schedule of fair market values of the different classes of real property in a local government unit within Metro Manila, as prepared jointly by the local assessors of the district to which the city or municipality belongs, has been published or posted in accordance with Sec. 212 of R.A. No. 7160 and enacted into ordinances by the sanggunians of the municipalities and cities concerned, the ordinances containing the schedule of fair market values must themselves be published or posted in the manner provided by Sec. 188 of R.A. No. 7160. Figuerres has not presented any evidence to show that the subject ordinances were not disseminated in accordance with these provisions of R.A. No. 7160. On the other hand, the Municipality of Mandaluyong presented a certificate of Williard S. Wong, Sanggunian Secretary of the Municipality of Mandaluyong that “Ordinance No. 125, S-1993… has been posted in accordance with Sec. 59(b) of R.A. No. 7160.” Thus, considering the presumption of validity in favor of the ordinances and the failure of petitioner to rebut such presumption, we are constrained to dismiss the petition in this case. CA affirmed. 2. TESTATE ESTATE OF CONCORDIA T. LIM VS. CITY OF MANILA, JESUS I. CALLEJA, in his capacity as City Treasurer of Manila, NICOLAS CATIIL, in his capacity as City Assessor of Manila, and/or GOVERNMENT SERVICE INSURANCE SYSTEM Facts: On February 13, 1969, the late Concordia Lim obtained a real estate loan from the defendant-appellee Government Service Insurance System (GSIS) in the amount of P875,488.54, secured by a mortgage constituted on two (2) parcels of land formerly covered by Transfer Certificates of Title Nos. 64075 and 63076 (later changed to TCT Nos. 125718 and 125719) registered in Manila with a three-story building thereon and located on No. 810 Nicanor Reyes St. (formerly Morayta), Sampaloc, Manila. When Lim failed to pay the loan, the mortgage was extrajudicially foreclosed and the subject properties sold at public auction. The GSIS, being the highest bidder, bought the properties. Upon Lim's failure to exercise her right of redemption, the titles to the properties were consolidated in favor of the GSIS in 1977.

Issues: 1. Whether public hearings are required to be conducted prior to the enactment of an ordinance imposing real property taxes. 2. Whether there is a need for the publication of fair market values.

However, pursuant to Resolution No. 188 of the Board of Trustees of the GSIS dated March 29, 1979, the estate of Lim, through Ernestina Crisologo Jose (the administratrix) was allowed to repurchase the foreclosed properties. On April 11, 1979, a Deed of Absolute Sale was executed. (Exhibit B, Table of Exhibits, pp. 3-5)

Held: 1.Yes. R.A. No. 7160, Sec. 186 provides that an ordinance levying taxes, fees, or charges “shall not be enacted without any prior public hearing conducted for the purpose.”

The defendant City Treasurer of Manila required the plaintiff-appellant to pay the real estate taxes due on the properties for the years 1977, 1978 and the first quarter of 1979 in the amount of P67,960.39, before the titles could be transferred to the plaintiff-appellant. The latter paid the amount under protest.

However, it is noteworthy that apart from her bare assertions, Figuerres has not presented any evidence to show that no public hearings were conducted prior to the enactment of the ordinances in question. On the other hand, the Municipality of Mandaluyong claims that public hearings were indeed conducted before the subject ordinances were adopted, although it likewise failed to submit any evidence to establish this allegation.

On July 11, 1979, the plaintiff-appellants counsel sent a demand letter requesting the GSIS to reimburse the taxes paid under protest. The GSIS refused.

In accordance with the presumption of validity in favor of an ordinance, their constitutionality or legality should be upheld in the absence of evidence showing that the procedure prescribed by law was not observed in their enactment. Furthermore, the lack of a public hearing is a negative allegation essential to petitioner’s cause of action in the present case. Hence, as petitioner is the party asserting it, she has the burden of proof. Since petitioner failed to rebut the presumption of validity in favor of the subject ordinances and to discharge the burden of proving that no public hearings were conducted prior to the enactment thereof, we are constrained to uphold their constitutionality or legality. 2. Yes. R.A. No. 7160, Sec. 212 which in part states: …The schedule of fair market values shall be published in a newspaper of general circulation in the province, city, or municipality concerned, or in the absence thereof, shall be posted in the provincial capitol, city or municipal hall and in two other conspicuous public places therein.

On September 6, 1979, a demand letter was sent to the City Treasurer of Manila to refund the amount but the latter also refused. On March 14, 1980, the plaintiff filed an action before the trial court for a sum of money for the refund or reimbursement of the real estate taxes paid under protest. After trial, the lower court dismissed the complaint for lack of jurisdiction. It ruled that the case involves a protested action of the City Assessor which should have been filed before the Local Board of Assessment Appeals of Manila (citing Section 30 of the Real Property Tax Code [P.D. No. 464]) in line with the principle that all administrative remedies must first be exhausted. Issues: 1. Whether the trial court has jurisdiction over the action for refund of real estate taxes paid under protest. 2. Whether plaintiff-appellant has the right to recover. 3. Whether the plaintiff-appellant has personality to sue.

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Held: 1. Yes. The Court rules that the plaintiff-appellant correctly filed the action for refund/reimbursement with the lower court as it is the courts which have jurisdiction to try cases involving the right to recover sums of money. Section 30 of the Real Property Tax Code is not applicable because what is questioned is the imposition of the tax assessed and who should shoulder the burden of the tax. There is no dispute over the amount assessed on the properties for tax purposes. 2. Yes. In real estate taxation, the unpaid tax attaches to the property and is chargeable against the taxable person who had actual or beneficial use and possession of it regardless of whether or not he is the owner. (Sections 3(a) and 19 of P.D. No. 464; Province of Nueva Ecija v. Imperial Mining Co., Inc., 118 SCRA 632 [1982]). Raising doubts on the validity of the imposition and collection of the real property tax for the designated periods before the title to the properties may be transferred, the plaintiff-appellant paid under protest. This step was taken in accordance with the provision of Section 62 of P.D. No. 464. 3. Yes. Regarding the issue on the existence of the personality to sue, the plaintiff-appellant asserts that since it was the one which paid under protest the amount of P67,960.39 as real property tax, then it is the real party in interest to sue for refund. 3. SYSTEMS PLUS COMPUTER COLLEGE OF CALOOCAN CITY VS. LOCAL GOVERNMENT OF CALOOCAN CITY, MAMERTO MANAHAN, ATTY. NESTOR D. FRANCISCO, as City Assessor and City Legal Officer of Caloocan City, and ADORACION ANGELES, Presiding Judge, Regional Trial Court of Caloocan City, Branch 121 Facts: Systems Plus Computer College (SPCC), a non-stock and non-profit educational institution which enjoys property tax exemption on its buildings but not on the land where the building stands since they were leasing it from their sister companies. SPCC requested city assessor and administrator to extend tax exemption to the parcels of land claiming that it was exempt under Article VI, Section 28(3) and other applicable provisions of the LCG, that it was being used actually, directly and exclusively for educational purposes. Request was denied since the landowners (sister company of SPCC) derived their income from the said land and so from their viewpoint, it wasn’t actually, directly and exclusively used for educational purposes. Subsequently, the lease contract was novated into a donation so SPCC informed the City Assessor of the new agreements and sought reconsideration. Still it was denied because (1) SPCC only served as an agency for its sister corporations for tax evasion, (2) exemption granted on theory that it will benefit the body of people, (3) land was not actually, directly and exclusively used for religious, charitable or educational purposes. SPCC filed petition for mandamus before RTC but petition dismissed for being premature. MFR denied. Issue: Whether Mandamus should be granted. Held: No. Mandamus is defined as a writ commanding a tribunal, corporation, board or person to do the act required to be done when it or he unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust or station, or unlawfully excludes another from the use and enjoyment of a right or office or which such other is entitled, there being no other plain, speedy, and adequate remedy in the ordinary course of law. Where administrative remedies are available, a petition for mandamus does not lie. Still has administrative remedies to exhaust through an appeal to Local Board of Assessment Appeals under Section 226 of RA 7160. The determination made by the respondent City Assessor with regard to the taxability of the subject real properties squarely falls within its power to assess properties for taxation purposes subject to appeal before the Local Board of Assessment Appeals. Not enforcing clear legal right by just presuming that they are in fact exempted from tax. Qualification for exemption is a fact which it must first prove by competent and sufficient evidence before the City Assessor. The authority to receive evidence, as basis for classification of

properties for taxation, is legally vested on the respondent City Assessor whose action is appealable to the Local Board of Assessment Appeals and the Central Board of Assessment Appeals, if necessary. Mandamus does not lie against the respondent City Assessor in the exercise of his function of assessing properties for taxation purposes. While its duty to conduct assessments is a ministerial function, the actual exercise thereof is necessarily discretionary. Well-settled is the rule that mandamus may not be availed of to direct the exercise of judgment or discretion in a particular way, or to retract or reverse an action already taken in the exercise of either. WHEREFORE, the instant petition for certiorari is hereby DISMISSED. SO ORDERED. 4. MANILA ELECTRIC COMPANY VS. CENTRAL BOARD OF ASSESSMENT APPEALS, BOARD OF ASSESSMENT APPEALS OF BATANGAS and PROVINCIAL ASSESSOR OF BATANGAS Facts: In 1969, a realty tax was imposed on two oil storage tanks installed by Manila Electric Company (Meralco) on a lot in San Pascual, Batangas which it leased in 1968 from Caltex (Phil.), In. With a total capacity 566,000 barrels, the tanks are used for storing fuel oil for Meralco’s power plants. According to Meralco, the tank is not attached to its foundation. It is not anchored or welded to the concrete circular wall. Its bottom plate is not attached to any part of the foundation by bolts, screws or similar devices. The tank merely sits on its foundation. Each empty tank can be floated by flooding its dike-inclosed location with water four feet deep. On the other hand, according to the hearing commissioners of the Central Board of Assessment Appeals, the area where the two tanks are located is enclosed with earthen dikes with electric steel poles on top thereof and is divided into two parts as the site of each tank. The foundation of the tanks is elevated from the remaining area. On both sides of the earthen dikes are two separate concrete steps leading to the foundation of each tank. In 1970, the municipal treasurer of Bauan, Batangas, on the basis of an assessment made by the provincial assessor, required Meralco to pay realty taxes on the two tanks. For the five-year period from 1970 to 1974, the tax and penalties amounted to P431,703.96. The Central Board of Assessment Appeals (composed of Acting Secretary of Finance Pedro M. Almanzor as chairman and Secretary of Justice Vicente Abad Santos and Secretary of Local Government and Community Development Jose Roño as members) in its decision dated November 5, 1976 ruled that the tanks together with the foundation, walls, dikes, steps, pipelines and other appurtenances constitute taxable improvements. Meralco received a copy of that decision on February 28, 1977. On the fifteenth day, it filed a motion for reconsideration which the Board denied in its resolution of November 25, 1977, a copy of which was received by Meralco on February 28, 1978. On March 15, 1978, Meralco filed this special civil action of certiorari to annul the Board's decision and resolution. It contends that the Board acted without jurisdiction and committed a grave error of law in holding that its storage tanks are taxable real property. Meralco contends that the said oil storage tanks do not fall within any of the kinds of real property enumerated in article 415 of the Civil Code and, therefore, they cannot be categorized as realty by nature, by incorporation, by destination nor by analogy. Stress is laid on the fact that the tanks are not attached to the land and that they were placed on leased land, not on the land owned by Meralco. Issue: Whether the storage tanks of Meralco are real properties, thus taxable. Held: Yes. Section 2 of the Assessment Law provides that the realty tax is due "on real property, including land, buildings, machinery, and other improvements" not specifically exempted in section 3 thereof. Section 2 of the Assessment

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Law provides that the realty tax is due "on real property, including land, buildings, machinery, and other improvements" not specifically exempted in section 3 thereof. This provision is reproduced with some modification in the Real Property Tax Code which provides: Sec. 38. Incidence of Real Property Tax. — They shall be levied, assessed and collected in all provinces, cities and municipalities an annual ad valorem tax on real property, such as land, buildings, machinery and other improvements affixed or attached to real property not hereinafter specifically exempted. The Code contains the following definition in its section 3: k) Improvements — is a valuable addition made to property or an amelioration in its condition, amounting to more than mere repairs or replacement of waste, costing labor or capital and intended to enhance its value, beauty or utility or to adapt it for new or further purposes. We hold that while the two storage tanks are not embedded in the land, they may, nevertheless, be considered as improvements on the land, enhancing its utility and rendering it useful to the oil industry. It is undeniable that the two tanks have been installed with some degree of permanence as receptacles for the considerable quantities of oil needed by Meralco for its operations. The case of Board of Assessment Appeals vs. Manila Electric Company, 119 Phil. 328, wherein Meralco's steel towers were held not to be subject to realty tax, is not in point because in that case the steel towers were regarded as poles and under its franchise Meralco's poles are exempt from taxation. Moreover, the steel towers were not attached to any land or building. They were removable from their metal frames. Nor is there any parallelism between this case and Mindanao Bus Co. vs. City Assessor, 116 Phil. 501, where the tools and equipment in the repair, carpentry and blacksmith shops of a transportation company were held not subject to realty tax because they were personal property. WHEREFORE, the petition is dismissed. The Board's questioned decision and resolution are affirmed. No costs. 5. CITY ASSESSOR OF CEBU CITY VS. ASSOCIATION OF BENEVOLA DE CEBU, INC. Facts: Benevola de Cebu is a non-stock non-profit organization which in 1990, a medical arts building was constructed and in 1998 was issued with a certification classifying the building as commercial. City assessor of Cebu assessed the building with a market value of Php 28,060,520 and on assessed value of Php 9,821,180 at the assessment level of 35% and not 10% which is currently imposed on private respondent herein. Petitioner claimed that the building is used as commercial clinic/spaces for renting out to physicians and thus classified as commercial. Benevola de Cebu contended that the building is used actually, directly and exclusively part of hospital and should have an assessment level of 10%.

Facts: Section 219 of Republic Act 7160 (R.A. 7160) or the Local Government Code of 1991 requires the conduct of the general revision of real property. The revision of real property assessments prescribed therein was not yet enforced in the City of Manila. Upon receipt of Memorandum Circular No. 04-95 from the Bureau of Local Government Finance relating to the failure of most of the cities and municipalities of Metropolitan Manila, including the City of Manila, to conduct the general revision of real property and after obtaining the necessary funds from the City Council, the City Assessor began the process of general revision based on the updated fair market values of the real properties. The City Assessor’s Office submitted the proposed schedule of fair market values to the City Council for its appropriate action. The council then enacted Manila Ordinance No. 7894 which was approved. With the implementation of the ordinance, the tax on the land owned by the petitioner was increase hence he filed a special proceeding for the declaration of nullity of the City of Manila Ordinance No. 7894 for being “unjust, excessive, oppressive or confiscatory.” Manila Ordinance No. 7905 took effect thereafter, reducing by fifty percent (50%) the assessment levels (depending on the use of property, e.g., residential, commercial) for the computation of tax due. The new ordinance amended the assessment levels provided by Section 74, paragraph (A) of Manila Ordinance No. 7794. Despite the amendment brought about by Manila Ordinance No. 7905, the controversy proceeded. The trial court dismissed the case for failure of the petitioner to exhaust administrative remedies. Issues: 1. Whether the doctrine of exhaustion of administrative remedies may be dispensed with in the instant case. 2. Whether respondent court failed to apply correctly Sections 212 and 221 of R.A. 7160. Held: 1. No. As a general rule, where the law provides for the remedies against the action of an administrative board, body, or officer, relief to courts can be sought only after exhausting all remedies provided. The reason rests upon the presumption that the administrative body, if given the chance to correct its mistake or error, may amend its decision on a given matter and decide it properly. Therefore, where a remedy is available within the administrative machinery, this should be resorted to before resort can be made to the courts, not only to give the administrative agency the opportunity to decide the matter by itself correctly, but also to prevent unnecessary and premature resort to courts.

Issue: Whether the new building is liable to pay the 35% assessment level.

“One of the reasons for the doctrine of exhaustion is the separation of powers which enjoins upon the judiciary a becoming policy of non-interference with matters coming primarily within the competence of other department. x x x”

Held: We hold that the new building is an integral part of the hospital and should not be assessed as commercial. Being a tertiary hospital, it is mandated to fully departmentalized and be equipped with the service capabilities needed to support certified medical specialist and other licensed physicians. The fact that they are holding office is a separate building does not take away the essence and nature of their services vis-a-vis the overall operation of the hospital and to its patients.

There are however a number of instances when the doctrine may be dispensed with and judicial action validly resorted to immediately. Among these exceptional cases are: (1) when the question raised is purely legal, (2) when the administrative body is in estoppel; (3) when the act complained of is patently illegal; (4) when there is urgent need for judicial intervention; (5) when the claim involved is small; (6) when irreparable damage will be suffered; (7) when there is no other plain, speedy and adequate remedy; (8) when strong public interest is involved; (9) when the subject of controversy is private land; and (10) in quo-warranto proceeding.

Under the Local Government Code, Sec. 26: All lands, buildings and other improvements thereon actually, directly and exclusively used for hospitals, cultural or scientific purposes and those owned and used by local water districts… shall be classified as special.

In the court’s opinion, however, the instant petition does not fall within any of the exceptions above-mentioned. 2. The petitioner claims that the effectivity date of Manila Ordinance No. 7894 and the schedule of the fair market values is January 1, 1996. He contends that Sec. 212 of the R.A. 7160 prohibits the general revision of real property

6. JAIME C. LOPEZ VS. CITY OF MANILA and HON. BENJAMIN A.G. VEGA, Presiding Judge, RTC, Manila, Branch 39

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assessment before the approval of the schedule of the fair market values. Thus, the alleged revision of real property assessment in 1995 is illegal. Based on the evidence presented by the parties, the steps to be followed for the mandatory conduct of General Revision of Real Property assessments, pursuant to the provision of Sec. 219 of R.A. No. 7160. The preparation of fair market values as a preliminary step in the conduct of general revision was set forth in Section 212 of R.A. 7160, to wit: (1) The city or municipal assessor shall prepare a schedule of fair market values for the different classes of real property situated in their respective Local Government Units for the enactment of an ordinance by the sanggunian concerned. (2) The schedule of fair market values shall be published in a newspaper of general circulation in the province, city or municipality concerned or the posting in the provincial capitol or other places as required by law.

shall be applied retroactively to January 1, 1996. The reduced assessment levels multiplied by the schedule of fair market values of real properties, provided by Manila Ordinance No. 7894, resulted to decrease in taxes. To that extent, the ordinance is likewise, a social legislation intended to soften the impact of the tremendous increase in the value of the real properties subject to tax. The lower taxes will ease, in part, the economic predicament of the low and middle-income groups of taxpayers. In enacting this ordinance, the due process of law was considered by the City of Manila so that the increase in realty tax will not amount to the confiscation of the property. WHEREFORE, the instant petition is hereby DENIED, and the assailed Order of Regional Trial Court of Manila, Branch 39 in Civil Case No. 96-77510 is hereby AFFIRMED. COSTS against the petitioner. SO ORDERED.

Thereafter, on January 1, 1996, the Sanggunian approved Manila Ordinance No. 7894. The schedule of values of real properties in the City of Manila, which formed an integral part of the ordinance, was likewise approved on the same date.

7. DR. PABLO R. OLIVARES, DR. ROSARIO DE LEON OLIVARES, EDWIN D. OLIVAREZ and OLIVAREZ REALTY CORPORATION VS. MAYOR JOEY MARQUEZ, CITY TREASURER SILVESTRE A. DE LEON, ASSISTANT CITY TREASURER LIBERATO M. CARABEO, CITY ASSESSOR SOLEDED S. MEDINA CUE and ASSISTANT CITY ASSESSOR JOSE MARLEO P. DEL ROSARIO Facts: Civil Case No. 98-0313 is a petition for certiorari, prohibition and mandamus filed by petitioners with the RTC on August 18, 1998, questioning the assessment and levy made by the Office of the City Treasurer of Paraaque City on petitioners’ properties. Petitioners alleged that on July 1, 1998, they received a final notice from the Office of the City Treasurer on their real estate tax delinquencies. They protested said notice in a letter dated July 7, 1998, and sought reinvestigation on the grounds that: (1) some of the taxes being collected have already prescribed and may no longer be collected as provided in Section 194 of the Local Government Code of 1991; (2) some properties have been doubly taxed/assessed; (3) some properties being taxed are no longer existent; (4) some properties are exempt from taxation as they are being used exclusively for educational purposes; and (5) some errors are made in the assessment and collection of taxes due on petitioners properties. They wrote another letter on July 24, 1998, but respondents failed to act thereon. Thus, petitioners sought, among others, the annulment of the assessments and respondents be ordered to act on their protest immediately.

When Manila Ordinance No. 7894 took effect on January 1, 1996, the existing assessment levels to be multiplied by the market value of the property in computing the assessed value (taxable value) subject to tax were those enumerated in Section 74 paragraph (A) of Manila Ordinance Number 7794.

Respondents filed a motion to dismiss Civil Case No. 98-0313 on the grounds that: (1) the trial court has no jurisdiction over tax assessment matters; (2) petitioners failed to comply with the requirements of a tax protest; and (3) the petition states no cause of action.

Despite the favorable outcome of Manila Ordinance No. 7905, the petitioner insists that since it was approved on April 10, 1996, it cannot be implemented in the year 1996. Using Section 221 of R.A. 7160 as basis for his argument, petitioner claims that the assessments or reassessments made after the first (1st) day of January of any year shall take effect on the first (1st) day of January of the succeeding year.

Petitioners opposed the motion, arguing that the trial court has jurisdiction over the case as the issue raised pertains to the authority of respondents to assess and collect the real estate taxes. Petitioners cite the case of Ty vs. Trampe, wherein the Court upheld the jurisdiction of the Regional Trial Court (Branch 163) of Pasig to entertain the petition for prohibition as it questions the power of the assessor to impose and collect any tax, and not merely the reasonableness thereof.

It was clear from the records that Mrs. Lourdes Laderas, the incumbent City Assessor, prepared the fair market values of real properties and in preparation thereof, she considered the fair market values prepared in the calendar year 1992. Upon that basis, the City Assessors Office updated the schedule for the year 1995. In fact, the initial schedule of fair market values of real properties showed an increase in real estate costs, which ranges from 600% - 3,330% over the values determined in the year 1979. However, after a careful study on the movement of prices, Mrs. Laderas eventually lowered the average increase to 1,020%. Thereafter, the proposed ordinance with the schedule of the fair market values of real properties was published in the Manila Standard on October 28, 1995 and the Balita on November 1, 1995.[18] Under the circumstances of this case, there was compliance with the requirement provided under Sec. 212 of R.A. 7160.

Contrarily, the trial court viewed that Manila Ordinance No. 7905 affects the resulting tax imposed on the market values of real properties as specified in Manila Ordinance No. 7894. Therefore, this supervening circumstance has rendered the petition, moot and academic, for failure of the petitioner to amend his cause of action. The trial court said:

Ruling in favor of respondents motion to dismiss, the trial court issued the herein assailed order dismissing Civil Case No. 98-0313. The trial court denied petitioners motion for reconsideration. Hence, petitioners filed the herein petition for review.

A mere cursory reading of his petition that he questioned fair market values and the assessment levels and the resulting tax based thereon as imposed by Ordinance No. 7894. The petitioner, however, failed to amend his petition. Thus, it is clear that the petition has become moot and academic. As correctly stated by the respondent, the facts, viz., the tax rates on level prescribed by Ordinance 7894 upon which the petition was anchored no longer exist because the tax rates in Ordinance No. 7894 have been amended, otherwise, impliedly repealed by Ordinance No. 7905. If only for this, the petition could be dismissed but this court followed the advice of the Supreme Court in the case of National Housing Authority vs. Court of Appeals, et. al. (121 SCRA 777) that the case may be decided in its totality resolving all interlocking issues in order to render justice to all concerned and end litigation once and for all. Although, we are in full accord with the ruling of the trial court, it is likewise necessary to stress that Manila Ordinance No. 7905 is favorable to the taxpayers when it specifically states that the reduced assessment levels

Issue: whether the court a quo has jurisdiction to try the case involving matters questioning the very authority and power of the assessor to impose assessment and of the City Treasurer to collect the tax. Held: The Court rules against petitioners. The petition has no merit. The extraordinary remedies of certiorari, prohibition and mandamus may be resorted to only when there is no other plain, available, speedy and adequate remedy in the course of law. Where administrative remedies are available, petitions for the issuance of these peremptory writs do not lie[8] in order to give the administrative

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body the opportunity to decide the matter by itself correctly and to prevent unnecessary and premature resort to courts. Section 252 of R.A. No. 7160, clearly sets forth the administrative remedies available to a taxpayer or real property owner who is not satisfied with the assessment or reasonableness of the real property tax sought to be collected. Chapter 3, Title Two, Book II of the Local Government Code, entitled Assessment Appeals, refers to the appellate procedure before the Local Board of Assessment Appeals (LBAA), as provided in Section 226, et seq. of the Code, and the Central Board of Assessment Appeals (CBAA), as provided in Section 230 thereof. Thus, should the taxpayer/real property owner question the excessiveness or reasonableness of the assessment, Section 252 directs that the taxpayer should first pay the tax due before his protest can be entertained. There shall be annotated on the tax receipts the words paid under protest. It is only after the taxpayer has paid the tax due that he may file a protest in writing within thirty days from payment of the tax to the Provincial, City or Municipal Treasurer, who shall decide the protest within sixty days from receipt. In no case is the local treasurer obliged to entertain the protest unless the tax due has been paid. If the local treasurer denies the protest or fails to act upon it within the 60-day period provided for in Section 252, the taxpayer/real property owner may then appeal or directly file a verified petition with the LBAA within sixty days from denial of the protest or receipt of the notice of assessment, as provided in Section 226 of R.A. No. 7160. And, if the taxpayer is not satisfied with the decision of the LBAA, he may elevate the same to the CBAA, which exercises exclusive jurisdiction to hear and decide all appeals from the decisions, orders and resolutions of the Local Boards involving contested assessments of real properties, claims for tax refund and/or tax credits or overpayments of taxes. An appeal may be taken to the CBAA by filing a notice of appeal within thirty days from receipt thereof. From the CBAA, the dispute may then be taken to the Court of Appeals by filing a verified petition for review under Rule 43 of the Rules of Court. The Court is not convinced with petitioners’ argument that their recourse of filing a petition before the trial court is proper as they are questioning the very authority of respondents to assess and collect the real estate taxes due on their properties, and not merely the correctness of said amount.

Even assuming that the assessors authority is indeed an issue, it must be pointed out that in order for the court a quo to resolve the petition, the issues of the correctness of the tax assessment and collection must also necessarily be dealt with. In Ty vs. Trampe, cited by petitioners, the Court held that jurisdiction over the case was properly vested with the trial court because what was being questioned is the very authority and power of the assessor, acting solely and independently, to impose the assessment and of the treasurer to collect the tax, and not merely of amounts of the increase in the tax. The petitioners therein were questioning the increased real estate taxes imposed by and being collected in Pasig City effective from the year 1994, premised on the legal question of whether or not P.D. No. 921 was repealed by R.A. No. 7160. P.D. No. 921, particularly Section 9 thereof, requires that the schedule of values of real properties in the Metropolitan Manila area shall be prepared jointly by the city assessors in the districts created therein; while Sec. 212 of R.A. No. 7160 states that the schedule shall be prepared by the provincial, city or municipal assessors of the municipalities within the Metropolitan Manila Area for the different classes of real property situated in their respective local government units for enactment by ordinance of the sanggunian concerned. In the present case, the authority of the assessor is not being questioned. Despite petitioners protestations, the petition filed before the court a quo primarily involves the correctness of the assessments, which are questions of fact, that are not allowed in a petition for certiorari, prohibition and mandamus. The court a quo is therefore precluded from entertaining the petition, and it appropriately dismissed the petition. WHEREFORE, the petition is DENIED for lack of merit.

LUNG CENTER OF THE PHILIPPINES vs. QUEZON CITY AND CONSTANTINO P. ROSAS, IN HIS CAPACITY AS CITY ASSESSOR OF QUEZON CITY G.R. No. 144104, June 29, 2004 Facts: The petitioner Lung Center is a non-stock and non-profit entity.

The well-established rule is that the allegations in the complaint and the character of the relief sought determine the nature of an action. A perusal of the petition before the RTC plainly shows that what is actually being assailed is the correctness of the assessments made by the local assessor of Paraaque on petitioners properties. The allegations in the said petition purportedly questioning the assessors authority to assess and collect the taxes were obviously made in order to justify the filing of the petition with the RTC. In fact, there is nothing in the said petition that supports their claim regarding the assessors alleged lack of authority. What petitioners raise are the following: (1) some of the taxes being collected have already prescribed and may no longer be collected as provided in Section 194 of the Local Government Code of 1991; (2) some properties have been doubly taxed/assessed; (3) some properties being taxed are no longer existent; (4) some properties are exempt from taxation as they are being used exclusively for educational purposes; and (5) some errors are made in the assessment and collection of taxes due on petitioners properties,[15] and that respondents committed grave abuse of discretion in making the improper, excessive and unlawful the collection of taxes against the petitioner[s].[16] Moreover, these arguments essentially involve questions of fact. Hence, the petition should have been brought, at the very first instance, to the LBAA.

It is the registered owner of a parcel of land. Erected in the middle lot is a hospital known as the Lung Center of the Philippines. A big space at the ground floor is being leased to private parties, for canteen and small store spaces, and to medical or professional practitioners who use the same as their private clinics for their patients whom they charge for their professional services.

Under the doctrine of primacy of administrative remedies, an error in the assessment must be administratively pursued to the exclusion of ordinary courts whose decisions would be void for lack of jurisdiction. But an appeal shall not suspend the collection of the tax assessed without prejudice to a later adjustment pending the outcome of the appeal.

The petitioner filed a Claim for Exemption from real property taxes with the City Assessor, predicated on its claim that it is a charitable institution. The petitioner’s request was denied,

Almost one-half of the entire area on the left side of the building along Quezon Avenue is vacant and idle, while a big portion on the right side, at the corner, is being leased for commercial purposes to a private enterprise known as the Elliptical Orchids and Garden Center. The petitioner accepts paying and non-paying patients. It also renders medical services to out-patients, both paying and non-paying. Aside from its income from paying patients, the petitioner receives annual subsidies from the government. Both the land and the hospital building of the petitioner were assessed for real property taxes in the amount of P4,554,860 by the City Assessor of Quezon City.

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Issues

Second Issue: those portions of its real property that are leased to private entities are not exempt from real property taxes as these are not actually, directly and exclusively used for charitable purposes.

Whether the petitioner is a charitable institution Whether the real properties of the petitioner are exempt from real property taxes

Ruling First issue: petitioner is a charitable institution within the context of the 1973 and 1987 Constitutions. To determine whether an enterprise is a charitable institution/entity or not, the elements which should be considered include the Statute creating the enterprise, Its corporate purposes, Its constitution and by-laws, The methods of administration, The nature of the actual work performed, The character of the services rendered, The indefiniteness of the beneficiaries, and The use and occupation of the properties. In the legal sense, a charity may be fully defined as a gift, to be applied consistently with existing laws, for the benefit of an indefinite number of persons, either by bringing their minds and hearts under the influence of education or religion, by assisting them to establish themselves in life or otherwise lessening the burden of government. The word “charitable” is not restricted to relief of the poor or sick. The test of a charity and a charitable organization are in law the same. The test whether an enterprise is charitable or not is whether it exists to carry out a purpose reorganized in law as charitable or whether it is maintained for gain, profit, or private advantage. Under P.D. No. 1823, the petitioner was organized for the welfare and benefit of the Filipino people principally to help combat the high incidence of lung and pulmonary diseases in the Philippines. Hence, the medical services of the petitioner are to be rendered to the public in general in any and all walks of life including those who are poor and the needy without discrimination. After all, any person, the rich as well as the poor, may fall sick or be injured or wounded and become a subject of charity. As a general principle, a charitable institution does not lose its character as such and its exemption from taxes simply because it derives income from paying patients, whether out-patient, or confined in the hospital, or receives subsidies from the government, so long as the money received is devoted or used altogether to the charitable object which it is intended to achieve; and no money inures to the private benefit of the persons managing or operating the institution. In this case, the petitioner adduced substantial evidence that it spent its income, including the subsidies from the government for its patients and for the operation of the hospital. It even incurred a net loss in 1991 and 1992 from its operations.

The settled rule in this jurisdiction is that laws granting exemption from tax are construed strictissimi juris against the taxpayer and liberally in favor of the taxing power. Taxation is the rule and exemption is the exception. The effect of an exemption is equivalent to an appropriation. Hence, a claim for exemption from tax payments must be clearly shown and based on language in the law too plain to be mistaken. Section 2 of Presidential Decree No. 1823, relied upon by the petitioner, specifically provides that the petitioner shall enjoy the tax exemptions and privileges: The Lung Center of the Philippines shall be exempt from the payment of taxes, charges and fees imposed by the Government or any political subdivision or instrumentality thereof with respect to equipment purchases made by, or for the Lung Center.

It is plain as day that under the decree, the petitioner does not enjoy any property tax exemption privileges for its real properties as well as the building constructed thereon. If the intentions were otherwise, the same should have been among the enumeration of tax exempt privileges under Section 2. Section 28(3), Article VI of the 1987 Philippine Constitution provides, thus: Charitable institutions, churches and parsonages or convents appurtenant thereto, mosques, non-profit cemeteries, and all lands, buildings, and improvements, actually, directly and exclusively used for religious, charitable or educational purposes shall be exempt from taxation. The tax exemption under this constitutional provision covers property taxes only. What is exempted is not the institution itself . . .; those exempted from real estate taxes are lands, buildings and improvements actually, directly and exclusively used for religious, charitable or educational purposes.” In light of the changes in the Constitution, the petitioner cannot rely on our ruling in Herrera v. Quezon City Board of Assessment Appeals which was promulgated on September 30, 1961 before the 1973 and 1987 Constitutions took effect. Under the 1973 and 1987 Constitutions and Rep. Act No. 7160 in order to be entitled to the exemption, the petitioner is burdened to prove, by clear and unequivocal proof, that (a) it is a charitable institution; and (b) its real properties are ACTUALLY, DIRECTLY and EXCLUSIVELY used for charitable purposes. “Exclusive” is defined as possessed and enjoyed to the exclusion of others; debarred from participation or enjoyment; and “exclusively” is defined, “in a manner to exclude; as enjoying a privilege exclusively.” If real property is used for one or more commercial purposes, it is not exclusively used for the exempted purposes but is subject to taxation. The words “dominant use” or “principal use” cannot be substituted for the words “used exclusively” without doing violence to the Constitutions and the law. Solely is synonymous with exclusively. What is meant by actual, direct and exclusive use of the property for charitable purposes is the direct and immediate and actual application of the property itself to the purposes for which the charitable institution is organized. It is not the use of the income from the real property that is determinative of whether the property is used for tax-exempt purposes. Accordingly, the portions of the land leased to private entities as well as those parts of the hospital leased to private individuals are not exempt from such taxes. On the other hand, the portions of the land occupied by the hospital and portions of the hospital used for its patients, whether paying or non-paying, are exempt from real property taxes.

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PHILRECA VS. DILG Fact: a class suit was filed by petitioners in their own behalf and in behalf of other electric cooperatives organized and existing under P.D. No. 269, as amended, and registered with the National Electrification Administration (NEA). Accordingly, petitioners enjoys Assistance; Exemption from Taxes, Imposts, Duties, Fees; Assistance from the National Power Corporation. Petitioners contend that they are exempt from payment of local taxes, including payment of real property tax. With the passage of the Local Government Code, however, they allege that their tax exemptions have been invalidly withdrawn. In particular, petitioners assail Sections 193 and 234 of the Local Government Code on the ground that the said provisions discriminate against them, in violation of the equal protection clause. Further, they submit that the said provisions are unconstitutional because they impair the obligation of contracts between the Philippine Government and the United States Government.

Issue: Whether the assailed provisions of the Local Government Code violates the rights of the Petitioners to the Equal Protection clause by unreasonable classifying them and withdrawing their Tax exemption

Held: There is No Violation of the Equal Protection Clause. The equal protection clause under the Constitution means that “no person or class of persons shall be deprived of the same protection of laws which is enjoyed by other persons or other classes in the same place and in like circumstances.” Thus, the guaranty of the equal protection of the laws is not violated by a law based on reasonable classification. The court hold that there is reasonable classification under the Local Government Code to justify the different tax treatment between electric cooperatives covered by P.D. No. 269, as amended, and electric cooperatives under R.A. No. 6938.

First, substantial distinctions exist between cooperatives under P.D. No. 269, as amended, and cooperatives under R.A. No. 6938. These distinctions are manifest in at least two material respects which go into the nature of cooperatives envisioned by R.A. No. 6938 and which characteristics are not present in the type of cooperative associations created under P.D. No. 269, as amended.

Capital Contributions by Members Extent of Government Control over Cooperatives Second, the classification of tax-exempt entities in the Local Government Code is germane to the purpose of the law. The Constitutional mandate that every local government unit shall enjoy local autonomy, does not mean that the exercise of power by local governments is beyond regulation by Congress. Thus, while each government unit is granted the power to create its own sources of revenue, Congress, in light of its broad power to tax, has the discretion to determine the extent of the taxing powers of local government units consistent with the policy of local autonomy.

Antonio Callanta, et. al. Vs. Office of the Ombudsman G.R. Nos. 115253-74 January 30, 1998 FACTS: It is alleged that a-general revision of assessment was conducted by the Office of the City Assessor in 1988 and sometime thereafter. Notices of assessment together with the new tax declarations were subsequently sent to the property owners. Thereafter, respondents, without the authority of the Local Board of Assessment Appeals, reassessed the values of certain properties, in contravention of Sec. 30 of P.D. 464. The said assessment resulted in the reduction of assessed values of the properties. In several similarly worded letter-complaints dated December 19, 1991, the City of Cebu simultaneously filed criminal and administrative charges against the above-enumerated officers and staff of the City Assessor's Office for "violations of Section 106 of the Real Property Tax Code[,] for gross negligence or willful under-assessment of real properties 32 within the city's taxing jurisdiction and for violation of Sec. 3 (e) of R.A. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act[,] for the act of causing undue injury to the City Government by giving private persons unwarranted benefits, advantages or preferences in the discharge of their official and administrative functions through manifest partiality, evident bad faith or gross inexcusable negligence by reassessing the real properties of taxpayers without any authority whatsoever, thereby resulting in the reduction of tax assessments to the prejudice of the city government . ISSUE: Whether or not petitioners violated the law by their acts of accommodating requests for reconsideration of the revised assessments. HELD: Under the rules, the Supreme Court stated that the issuance of a notice of assessment by the local assessor shall be his last action on a particular assessment. On the side of the property owner, it is this last action which gives him [the] right to appeal to the Local Board of Assessment Appeals. The above procedure also, does not grant the property owner the remedy of filing a motion for reconsideration before the local assessor. The act of herein petitioners in providing the corresponding notices of assessment the chance for the property owners concerned to file a motion for reconsideration and for acting on the motions filed is not in accordance with law and in excess of their authority and therefore constitutes ultra vires acts. Indeed, the long-standing practice adverted to by petitioners does not justify a continuance of their acts. We cannot sanction such compromising situations. Henceforth, whenever the local assessor sends a notice to the owner or lawful possessor of real property of its revised assessed value, the former shall thereafter no longer have any jurisdiction to entertain any request for a review or readjustment. The appropriate forum where the aggrieved party may bring his appeal is the LBAA, as provided by law. Hagonoy Market Vendor Association Vs. Municipality of Hagonoy GR no. 137621 February 6, 2002 FACTS:

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On October 1, 1996, the Sangguniang Bayan of Hagonoy, Bulacan enacted Ordinance KautusanBlg. 28 which increased the stall rentals of the Market vendors in Hagonoy.Posting of the said ordinance was made on November 4-25 1996.Subsequently, On December 8, 1997, the petitioner’s President filed an appeal with the Secretary of Justice assailing the constitutionality of the tax ordinance being unaware of its posting. Respondent on the other hand, opposed the appeal contending that the ordinance took effect on October 6, 1996 and that the ordinance, as approved, was posted as required by law. Hence, it was pointed out that petitioner’s appeal, made over a year later, was already time-barred. The Secretary of Justice ruled on the matter dismissing the appeal on the ground that it was filed out of time, having been filed beyond thirty (30) days from the effectivity of the Ordinance on October 1, 1996, as prescribed under Section 187 of the 1991 Local Government Code ISSUE: Whether or not the Appeal to the Secretary of Justice was time barred? HELD: Yes. The Supreme Court held that under Section 187 of the Local Government Code, it requires that an appeal of a tax ordinance or revenue measure should be made to the Secretary of Justice within thirty (30) days from effectivity of the ordinance and even during its pendency; the effectivity of the assailed ordinance shall not be suspended. In the case at bar, Municipal Ordinance No. 28 took effect in October 1996. Petitioner filed its appeal only in December 1997, more than a year after the effectivity of the ordinance in 1996. Clearly, the Secretary of Justice correctly dismissed it for being time-barred. At this point, it is apropos to state that the timeframe fixed by law for parties to avail of their legal remedies before competent courts are not a “mere technicality” that can be easily brushed aside. The periods stated in Section 187 of the Local Government Code are mandatory. Ordinance No. 28 is a revenue measure adopted by the municipality of Hagonoy to fix and collect public market stall rentals. Being its lifeblood, collection of revenues by the government is of paramount importance. The funds for the operation of its agencies and provision of basic services to its inhabitants are largely derived from its revenues and collections. Thus, it is essential that the validity of revenue measures is not left uncertain for a considerable length of time. Hence, the law provided a time limit for an aggrieved party to assail the legality of revenue measures and tax ordinances. ALLIED BANKING CORPORATION AS TRUSTEE FOR THE TRUST FUND OF COLLEGE ASSURANCE PLAN PHILIPPINES, INC. (CAP) vs. THE QUEZON CITY GOVERNMENT, THE QUEZON CITY TREASURER, THE QUEZON CITY ASSESSOR AND THE CITY MAYOR OF QUEZON CITY G.R. No. 154126October 11, 2005 CARPIO MORALES, J.: FACTS: On December 19, 1995, the Quezon City government enacted City Ordinance No. 357, Series of 1995 which provided that that parcels of land sold, ceded, transferred and conveyed for remuneratory consideration after the effectivity of this revision shall be subject to real estate tax based on the actual amount reflected in the deed of conveyance or the current approved zonal valuation of the Bureau of Internal Revenue prevailing at the time of sale, cession, transfer and conveyance, whichever is higher, as evidenced by

the certificate of payment of the capital gains tax issued therefor. On July 1, 1998, petitioner, as trustee for College Assurance Plan of the Philippines, Inc., purchased from Liwanag C. Natividad et al. a 1,000 square meter parcel of land located along Aurora Boulevard, Quezon City in the amount of P38, 000,000.Prior to the sale, Natividad et al. had been paying the total amount of P85, 050 as annual real property tax based on the property’s fair market value of P4, 500,000.00 and assessed value of P1, 800,000.00. After its acquisition of the property, petitioner wasrequired to pay P102, 600.00 as quarterly real estate tax (or P410, 400.00 annually) which pegged the market value of the property at P38, 000,000.00 – the consideration appearing in the Deed of Absolute Sale, and its assessed value at P15, 200,000. Petitioner paid the quarterly real estate tax for the property from the 1st quarter of 1999 up to the 3 rd quarter of 2000. Its tax payments for the 2nd, 3rd, and 4th quarter of 1999, and 1st and 2nd quarter of 2000 were, however, made under protest. In its written protest with the City Treasurer, petitioner assailed Section 3 of the ordinance as null and void, it contending that the proviso is unjust, excessive, oppressive, unreasonable, confiscatory and contrary to Section 130 of the Local Government Code. Petitioner later sent a March 24, 2000 demand letter to the Quezon City Treasurer’s Office seeking a refund of the real estate taxes it erroneously collected from it. The letter was referred for appropriate action to the City Assessor who, by letter dated May 7, 2000, denied the demand for refund on the ground that the ordinance is presumed valid and legal unless otherwise declared by a court of competent jurisdiction. ISSUE: 4 WHETHER OR NOT the proviso fixing the appraised value of property at the stated consideration at which the property was last sold is valid RULING: This Court holds that the proviso in question is invalid as it adopts a method of assessment or appraisal of real property contrary to the Local Government Code, its Implementing Rules and Regulations and the Local Assessment Regulations No. 1-92 issued by the Department of Finance. Under these immediately stated authorities, real properties shall be appraised at the current and fair market value prevailing in the locality where the property is situated and classified for assessment purposes on the basis of its actual use. “Fair market value” is the price at which a property may be sold by a seller who is not compelled to sell and bought by a buyer who is not compelled to buy, taking into consideration all uses to which the property is adapted and might in reason be applied. The criterion established by the statute contemplates a hypothetical sale. Hence, the buyers need not be actual and existing purchasers. As this Court stressed in Reyes v. Almanzor, assessors, in fixing the value of real property, have to consider all the circumstances and elements of value, and must exercise prudent discretion in reaching conclusions. In this regard, Local Assessment Regulations No. 1-92 establishes the guidelines to assist assessors in classifying, appraising and assessing real property. Local Assessment Regulations No. 1-92 suggests three approaches in estimating the fair market value, namely: (1) the sales analysis or market

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data approach; (2) the income capitalization approach; and (3) the replacement or reproduction cost approach. Under the sales analysis approach, the price paid in actual market transactions is considered by taking into account valid sales data accumulated from among the various sources stated in Sections 202, 203, 208, 209, 210, 211 and 213 of the Code. In the income capitalization approach, the value of an incomeproducing property is no more than the return derived from it. An analysis of the income produced is necessary in order to estimate the sum which might be invested in the purchase of the property. The reproduction cost approach, on the other hand, is a factual approach used exclusively in appraising man-made improvements such as buildings and other structures, based on such data as materials and labor costs to reproduce a new replica of the improvement. Accordingly, this Court holds that the proviso directing that the real property tax be based on the actual amount reflected in the deed of conveyance or the prevailing BIR zonal value is invalid not only because it mandates an exclusive rule in determining the fair market value but more so because it departs from the established procedures stated in the Local 5

tax higher than the tax assessed at the last prior conveyance within the same period. To save on taxes, real property owners or administrators are forced to hold on to the property until after the said three-year period has lapsed. Should they nonetheless decide to sell within the said three-year period, they are compelled to dispose the property at a price not exceeding that obtained from the last prior conveyance in order to avoid a higher tax assessment. In these two scenarios, real property owners are effectively prevented from obtaining the best price possible for their properties and unduly hampers the equitable distribution of wealth. In fine, public respondent Quezon City Government exceeded its statutory authority when it enacted the proviso in question. The provision is 6 thus null and void ab initio for being ultra vires and for contravening the provisions of the Local Government Code, its implementing regulations and the Local Assessment Regulations No. 1-92. As such, it acquired no legal effect and conferred no rights from its inception.

Assessment Regulations No. 1-92 and unduly interferes with the duties statutorily placed upon the local assessor by completely dispensing with his analysis and discretion which the Code and the regulations require to be exercised. An ordinance that contravenes any statute is ultra vires and void. Further, it is noted that there is nothing in the Charter of Quezon City and the Quezon City Revenue Code of 1993 that authorize public respondents to appraise property at the consideration stated in the deed of conveyance.Using the consideration appearing in the deed of conveyance to assess or appraise real properties is not only illegal since “the appraisal, assessment, levy and collection of real property tax shall not be let to any private person,” but it will completely destroy the fundamental principle in real property taxation – that real property shall be classified, valued and assessed on the basis of its actual use regardless of where located, whoever owns it, and whoever uses it. Necessarily, allowing the parties to a private sale to dictate the fair market value of the property will dispense with the distinctions of actual use stated in the Code and in the regulations. The invalidity of the assessment or appraisal system adopted by the proviso is not cured even if the proviso mandates the comparison of the stated consideration as against the prevailing BIR zonal value, whichever is higher, because an integral part of that system still permits valuing real property in disregard of its “actual use.” In the same vein, there is also nothing in the Code or the regulations showing the congressional intent to require an immediate adjustment of taxes on the basis of the latest market developments as, in fact, real property assessments may be revised and/or increased only once every three (3) years. Consequently, the real property tax burden should not be interpreted to include those beyond what the Code or the regulations expressly and clearly state. While the Local Government Code provides that the assessment of real property shall not be increased oftener than once every three (3) years, the questioned part of the proviso subjects the real property to a tax based on the actual amount appearing on the deed of conveyance or the current approved zonal valuation of the Bureau of Internal Revenue prevailing at the time of sale, cession, transfer and conveyance, whichever is higher. As such, any subsequent sale during the three-year period will result in a real property

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