G.R. No. 192300. November 24, 2014.

* 506
  506 SUPREME COURT
NATIONAL POWER CORPORATION, petitioner, vs. MUNICIPAL REPORTS ANNOTATED
GOVERNMENT OF NAVOTAS, SANGGUNIANG BAYAN OF NAVOTAS and National Power Corporation
MANUEL T. ENRIQUEZ, in his capacity as Municipal Treasurer of Navotas, vs. Municipal Government of
respondents. Navotas
ground that the controversy did not involve questions of fact but only of
Remedial Law; Civil Procedure; Courts; Court of Tax Appeals; Jurisdiction;
law.
Local Taxation; The Court of Tax Appeals (CTA), sitting as Division, has jurisdiction
Remedial Law; Civil Procedure; Jurisdiction; The well-established rule is that
to review by appeal the decisions, rulings and resolutions of the Regional Trial
the allegations in the complaint and the character of the relief sought determine
Court (RTC) over local tax cases, which includes real property taxes.—Indeed, the
the nature of an action.—The well-established rule is that the allegations in the
CTA, sitting as Division, has jurisdiction to review by appeal the decisions, rulings
complaint and the character of the relief sought determine the nature of an
and resolutions of the RTC over local tax cases, which includes real property
action. Here, it is not disputed that the machineries and equipment are being
taxes. This is evident from a perusal of the Local Government Code (LGC) which
used for power generation. The primordial issue, however, is whether these
includes the matter of Real Property Taxation under one of its main chapters.
machineries and equipment are actually, directly and exclusively used by
Indubitably, the power to impose real property tax is in line with the power
petitioner within the purview of Section 234 of the LGC, which exempts it from
vested in the local governments to create their own revenue sources, within the
payment of real property taxes.
limitations set forth by law. As such, the collection of real property taxes is
Same; Same; Courts; Court of Tax Appeals; Appeals; If a taxpayer is not
conferred with the local treasurer rather than the Bureau of Internal Revenue.
satisfied with the decision of the Central Board of Assessment Appeals (CBAA) or
Judicial Review; In the event that the taxpayer questions the authority and
the Regional Trial Court (RTC), as the case may be, the taxpayer may file, within
power of the assessor to impose the assessment, and of the treasurer to collect
thirty (30) days from receipt of the assailed decision, a petition for review with the
the real property tax, resort to judicial action may prosper.—In the event that the
Court of Tax Appeals (CTA) pursuant to Section 7(a) of Republic Act (RA) No. 9282.
taxpayer questions the authority and power of the assessor to impose the
—In fine, if a taxpayer is not satisfied with the decision of the CBAA or the RTC, as
assessment, and of the treasurer to collect the real property tax, resort to judicial
the case may be, the taxpayer may file, within thirty (30) days from receipt of the
action may prosper. This is in consonance with the ruling in Ty v. Trampe, 250
assailed decision, a petition for review with the CTA pursuant to Section 7(a) of
SCRA 500 (1995). Here, a petition for prohibition with prayer for a restraining
R.A. 9282. In cases where the question involves the amount of the tax or the
order and/or writ of preliminary injunction was filed to declare null and void the
correctness thereof, the appeal will be pursuant to Section 7(a)(5) of R.A. 9282.
new tax assessments and enjoin the collection of real estate taxes based on said
When the appeal comes from a judicial remedy which questions the authority of
assessments. Despite the alleged non-exhaustion of administrative remedies and
the local government to impose the tax, Section 7(a)(3) of R.A. 9282 applies.
nonpayment of the real property tax, the Court gave due course to the case on
Thereafter, such decision, ruling or resolution may be further reviewed by the
the
CTA En Banc pursuant to Section 2, Rule 4 of the Revised Rules of the CTA.
_______________
PETITION for review on certiorari of the decision and resolution of the
*  THIRD DIVISION. Court of Tax Appeals En Banc.
The facts are stated in the opinion of the Court.
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   Office of the Solicitor General for petitioner. _______________
  Emmanuel M. Pantoja for respondents.
1  Penned by Presiding Justice Ernesto D. Acosta, with Associate Justices Juanito C.
507 Castañeda, Jr., Lovell R. Bautista, Erlinda P. Uy, Caesar A. Casanova, Esperanza R. Fabon-
Victorino, Cielito N. Mindaro-Grulla, and Amelia R. Cotangco-Manalastas, concurring; Olga
VOL. 741, NOVEMBER 507 Palanca-Enriquez, dissenting; Rollo, pp. 50-75.
24, 2014 2  Id., at pp. 76-79.
National Power Corporation 508
vs. Municipal Government of 508 SUPREME COURT
Navotas REPORTS ANNOTATED
PERALTA, J.: National Power Corporation
 
vs. Municipal Government of
Before us is a Petition for Review on Certiorari under Rule 45 of the
Navotas
Rules of Court seeking to reverse and set aside the Decision 1 dated March
tas and may be served with summons and other court processes at the Municipal
1, 2010 and Resolution2 dated May 6, 2010 of the Court of Tax Appeals
Hall Building, Navotas, Metro Manila.
(CTA) En Banc in E.B. No. 461. On the respective dates of November 16, 1988 and June 29, 1992, petitioner
The facts, as found by the CTA En Banc, are as follows: entered into a Build-Operate-and-Transfer Project Agreements (BOTs) with
Petitioner National Power Corporation (NPC) is a government-owned and - Mirant Navotas I Corporation (MNC-I), formerly known as Hopewell Energy
controlled corporation organized and existing under and by virtue of Republic Act Philippines Corporation, and Mirant Navotas II Corporation (MNC-II), formerly
(RA) No. 6395, as amended, with principal office address at NPC Office Building known as Hopewell Tileman (Philippines) Corporation. The BOTs are for the
Complex, corner Quezon Avenue and BIR Road, East Triangle, Diliman, Quezon construction, operation and eventual transfer to petitioner of MNC-I’s 200-MW
City. and MNC-II’s 100-MW gas turbine power stations. During the period of the
Respondent Municipal Government of Navotas, is a local government unit, agreement, the operation of the power stations shall be under the actual and
hosting petitioner’s Navotas Power Stations I and II located in the Municipality of direct control and supervision of petitioner. Consequently, petitioner has the
Navotas. It may be served with summons and court processes through the obligation to pay for all taxes, except business taxes, relative to the
Municipal Mayor, at the Municipal Hall Building, Navotas, Metro Manila. implementation of the agreements.
Respondent Sangguniang Bayan of Navotas is a legislative body being sued for For the 1 quarter of 2003, petitioner paid respondent Municipality, real
st 

the purpose of enjoining it from performing any and all acts geared toward [the] property taxes in the amounts of P3,382,715.88 and P4,973,869.83 for the MNC-I
collection of the assailed taxes and/or sale of petitioner’s properties during the and MNC-II power stations, respectively. After the said quarter, petitioner
pendency of the instant petition. It may be served with summons and other court stopped paying the real property taxes, claiming exemption from payment
processes through the Vice Mayor, as the presiding officer, at the Municipal Hall thereon pursuant to Section 234(c) of the Local Government Code (LGC) of 1991.
Building, Navotas, Metro Manila. In a letter dated March 30, 2004, petitioner informed the Municipal Assessor
Respondent Manuel T. Enriquez is being sued in his official capacity as the of Navotas (Municipal Assessor) of their position on the exemption from real
Municipal Treasurer of Navo- property tax of the subject properties, pertaining to machineries and equipment
which are in the name of Hopewell Tileman (Phils.) Corporation.
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 Pursuant to the BOTs, MNC-I and MNC-II eventually transferred to petitioner there were no bidders for the purchase of the subject properties, the same were
all their rights, title and interests in and to the fixtures, fittings, plant and forfeited in favor of respondent Municipality.
equipment, and improvements comprising the power stations on March 24, 2003 Petitioner filed an amended petition before the RTC seeking to declare as null
and August 1, 2005, respectively. and void the public auction and the forfeiture of the subject properties in favor of
On May 25, 2005, MNC-II received four notices from respondent Municipal respondent Municipality on the ground that these actions are patently illegal
Treasurer informing MNC-I because the subject properties are exempt from real property tax.
The RTC denied the petition on May 23, 2007. It ruled that although Section
509
234 of the LGC exempts petitioner from payment of real property tax due on the
VOL. 741, NOVEMBER 509 sub-
24, 2014
510
National Power Corporation
510 SUPREME COURT
vs. Municipal Government of
REPORTS ANNOTATED
Navotas
and MNC-II of their real property tax delinquencies for the 2 , 3 , and
nd rd
National Power Corporation
4 quarters of calendar year 2003 and for the calendar years 2004 and 2005.
th  vs. Municipal Government of
Details are as follows: Navotas
ject properties located at MNC-I and MNC-II, failure of petitioner to exhaust
administrative remedies resulted in the finality of the assessment; thus, the
eventual collection was in order. The RTC explained that petitioner should have
appealed the assessments to the Local Board of Assessment Appeals (LBAA),
pursuant to Section 226 of the LGC, within 60 days from the date of receipt of the
  written notice of assessment. If not satisfied with the decision of the LBAA,
In a letter dated July 26, 2005, petitioner reiterated to the Municipal Assessor petitioner should appeal to the Central Board of Assessment Appeals (CBAA),
of Navotas their position that the subject properties are exempt from real pursuant to Section 229 of the same code. The RTC further went on in saying that
property tax. before initiating any protest to the assessment, the tax due must first be paid.
On November 21, 2005, a Warrant of Levy was received from respondent After an extension of 30 days was granted, a Petition for Review with
Municipal Treasurer. MNC-II also received two Notices of Sale of Delinquent Real application for Temporary Restraining Order and/or Order of Suspension of
Property, scheduling the public auction of the subject properties on December 21, Collection and Writ of Preliminary Injunction was seasonably filed with this Court
2005. though registered mail on July 27, 2007 and received on August 2, 2007. The
On December 16, 2005, petitioner filed before the Regional Trial Court (RTC) Petition was raffled to the Second Division of this Court.
of Malabon City, a Petition for Declaratory Relief, Annulment of Notice of Respondents filed their Comment/Opposition through registered mail on
Delinquency, Warrant of Levy, and Notice of Sale with prayer for the issuance of a October 15, 2007 and which was received by this Court on October 30, 2007.
Writ of Preliminary Injunction and Temporary Restraining Order (TRO). In a Resolution dated December 17, 2007, the Second Division treated
Petitioner’s application for the issuance of a TRO was denied by the RTC. petitioner’s application for TRO and/or Order of Suspension of Collection and Writ
Respondents proceeded with the scheduled public auction. Considering that of Preliminary Injunction as a “Motion to Suspend the Collection of Taxes,”
3|Page
considering that the ownership of the auctioned properties was not yet Unfazed, petitioner filed a Motion for Reconsideration but the same
consolidated in the name of respondents; thus, the collection of payment of the was denied in a Resolution dated May 6, 2010.
alleged deficiency taxes was not yet consummated. The application was granted Accordingly, petitioner lodged the present petition praying as follows:
on equitable considerations, to preserve the status quo during the pendency of WHEREFORE, it is respectfully prayed that the Decision dated March 1, 2010
the appeal, and in order not to render ineffectual and nugatory the judgment that and Resolution dated May 6, 2010 of the Court of Tax Appeals En Banc be
will be rendered. Respondents were enjoined from consolidating the ownership REVERSED and SET ASIDE; a new one be rendered declaring:
of the subject properties, from confiscating them, from taking possession thereof
and from doing any and all acts relative thereto during the pendency of _______________
petitioner’s appeal, until further ordered.
3  Id., at pp. 51-56.
511 4  Id., at p. 74. (Emphasis in the original)
VOL. 741, NOVEMBER 511 512
24, 2014 512 SUPREME COURT
National Power Corporation REPORTS ANNOTATED
vs. Municipal Government of National Power Corporation
Navotas vs. Municipal Government of
In a Resolution dated March 6, 2008, the case was considered submitted for Navotas
Decision after petitioner manifested to adopt its Petition for Review as its
1) that the Court of Tax Appeals has jurisdiction over the subject matter of the
Memorandum and after respondents failed to file their Memorandum.
case;
In a Decision promulgated on July 18, 2008, the Second Division dismissed the
2) petitioner as exempt from paying real property taxes over the properties
Petition and sustained the RTC’s Decision dated May 23, 2007. Petitioner’s
subject of the present case; and
Motion for Reconsideration filed on August 6, 2008 was likewise denied in a
3) the assailed Notices of Delinquency, Warrant of Levy and Notice of Sale and
Resolution dated January 9, 2009. 3

the Auction Sale and Forfeiture as null and void.

  Petitioner prays for such other reliefs just and equitable under the premises.
5

Resultantly, petitioner filed a petition before the CTA En Banc.  

In a Decision dated March 1, 2010, the CTA En Banc affirmed the CTA Thus, petitioner assigns the following errors for this Court’s resolution:
Second Division’s decision and held as follows: THE COURT OF TAX APPEALS EN BANC ERRED IN SUSTAINING THE DECISION
WHEREFORE, finding no reversible error in the assailed Decision promulgated OF THE COURT OF TAX APPEALS SECOND DIVISION WHICH HELD THAT:
on July 18, 2008 and the Resolution dated January 9, 2009, the instant Petition for 1) IT HAS NO JURISDICTION OVER THE INSTANT PETITION.
Review is hereby DISMISSED for lack of merit. 2) APPEALS TO THE LBAA AND CBAA ARE REQUIRED BEFORE THE PETITION
SO ORDERED. 4
DATED DECEMBER 12, 2005 (AS AMENDED ON JANUARY 5, 2006) FOR
DECLARATORY RELIEF FILED BY PETITIONER BEFORE THE REGIONAL TRIAL COURT
 
MAY BE GIVEN DUE COURSE. 6

4|Page
   4. Decisions of the Commissioner of Customs in cases involving liability for
In essence, the issue is whether or not the CTA Second Division has customs duties,
jurisdiction to review the decision of the RTC which concerns a petition for
7  An Act Expanding the Jurisdiction of the Court of Tax Appeals (CTA),
declaratory relief involving real property taxes. Elevating its Rank to the Level of a Collegiate Court with Special Jurisdiction and
We rule in the affirmative. Enlarging its Membership, Amending for the Purpose Certain Sections of Republic
_______________
Act No. 1125, as Amended, Otherwise Known as the Law Creating the Court of
5  Id., at pp. 43-44. Tax Appeals, and for Other Purposes.
6  Id., at p. 23.
514
513 514 SUPREME COURT
VOL. 741, NOVEMBER 513 REPORTS ANNOTATED
24, 2014 National Power Corporation
National Power Corporation vs. Municipal Government of
vs. Municipal Government of Navotas
Navotas fees, or other monetary charges, seizure, detention or release of property
First, Section 7 of Republic Act (R.A.) No. 9282  explicitly enumerates
7 affected, fines, forfeitures or other penalties in relation thereto, or other matters
the scope of the CTA’s jurisdiction over decisions, orders or resolutions of arising under the Customs Laws or other laws administered by the Bureau of
Customs;
the RTC in local tax cases, to wit:
5. Decisions of the Central Board of Assessment Appeals in the exercise of its
Sec. 7. Jurisdiction.—The CTA shall exercise:
appellate jurisdiction over cases involving the assessment and taxation of real
(a) Exclusive appellate jurisdiction to review by appeal, as herein provided:
property originally decided by the provincial or city board assessment appeals;
1. Decisions of the Commissioner of Internal Revenue in cases involving
6. Decisions of the Secretary of Finance on customs cases elevated to him
disputed assessments, refunds of internal revenue taxes, fees or other charges,
automatically for review from decisions of the Commissioner of Customs which
penalties in relation thereto, or other matters arising under the National Internal
are adverse to the Government under Section 2315 of the Tariff and Customs
Revenue Code or other laws administered by the Bureau of Internal Revenue;
Code;
2. Inaction by the Commissioner of Internal Revenue in cases involving
7. Decisions of the Secretary of Trade and Industry, in the case of
disputed assessments, refunds of internal revenue taxes, fees or other charges,
nonagricultural product, commodity or article, and the Secretary of Agriculture in
penalties in relation thereto, or other matters arising under the National Internal
the case of agricultural product, commodity or article, involving dumping and
Revenue Code or other laws administered by the Bureau of Internal Revenue,
countervailing duties under Sections 301 and 302, respectively, of the Tariff and
where the National Internal Revenue Code provides a specific period of action, in
Customs Code, and safeguard measures under Republic Act No. 8800, where
which case the inaction shall be deemed a denial;
either party may appeal the decision to impose or not to impose said duties;
3. Decisions, orders or resolutions of the Regional Trial Courts in local tax
x x x8

cases originally decided or resolved by them in the exercise of their original or

appellate jurisdiction;  

5|Page
 Such authority is echoed in Section 3, Rule 4 of the Revised Rules of the We, therefore, disagree with the conclusion of the CTA En Banc that
CTA, which enumerates the jurisdiction of the CTA, sitting as a Division, to real property taxes have always been treated by our laws separately from
wit: local taxes. The fact that a separate chapter is devoted to the treatment of
Section 3. Cases Within the Jurisdiction of the Court in Division.—The Court real property taxes, and a distinct appeal procedure is provided therefor
Division shall exercise: does not justify an inference that Section 7(a)(3) of R.A. 9282 pertains only
_______________
to local taxes other than real property taxes. Rather, the term “local taxes”
in the aforementioned provision should be considered in its general and
8  Emphasis supplied. comprehensive sense, which embraces real property tax assessments, in
line with the precept Generalia verba sunt generaliter inteligencia — what
515
is generally spoken shall be generally understood.10 Between
VOL. 741, NOVEMBER 515 _______________
24, 2014
National Power Corporation 9   Id.
10  Gutierrez v. House of Representatives Committee on Justice, G.R. No. 193459, February
vs. Municipal Government of 15, 2011, 643 SCRA 198, 244.
Navotas
516
(a) Exclusive original or appellate jurisdiction to review by appeal the
following: 516 SUPREME COURT
x x x x REPORTS ANNOTATED
(3) Decisions, resolutions or orders of the Regional Trial Courts in local tax National Power Corporation
cases decided or resolved by them in the exercise of their original jurisdiction; vs. Municipal Government of
x x x9

Navotas
  the restricted sense and the general meaning of a word, the general must
Indeed, the CTA, sitting as Division, has jurisdiction to review by appeal prevail unless it was clearly intended that the restricted sense was to be
the decisions, rulings and resolutions of the RTC over local tax cases, which used.11 In the words of the Court in Marcos v. Chief of Staff:12
includes real property taxes. This is evident from a perusal of the Local Where words are used which have both, a restricted and a general meaning,
Government Code (LGC) which includes the matter of Real Property the general must prevail over the restricted unless the nature of the subject
Taxation under one of its main chapters. Indubitably, the power to impose matter of the context clearly indicates that the limited sense is intended. 13

real property tax is in line with the power vested in the local governments  
to create their own revenue sources, within the limitations set forth by Here, the context in which the word “local taxes” is employed does not
law. As such, the collection of real property taxes is conferred with the clearly indicate that the limited or restricted view was intended by the
local treasurer rather than the Bureau of Internal Revenue. legislature. In addition, the specification of real property tax assessment
under paragraph (a)(5) of Section 7 of R.A. 9282, in relation to the
6|Page
decisions of the CBAA, is only proper given that the CBAA has no assessments and enjoin the collection of real estate taxes based on said
jurisdiction, either original or appellate, over cases involving local taxes assessments. Despite the alleged non-exhaustion
other than real property taxes. _______________
Based on the foregoing, the general meaning of “local taxes” should be
Board of Assessment Appeals of the provincial or city by filing a petition under oath in the
adopted in relation to paragraph (a)(3) of Section 7 of R.A. 9282, which form prescribed for the purpose, together with copies of the tax declarations and such
necessarily includes real property taxes. affidavits or documents submitted in support of the appeal.
Second, as correctly pointed out by petitioner, when the legality or 15  Section 229. Action by the Local Board of Assessment Appeals.—
(a)  The Board shall decide the appeal within one hundred twenty (120) days from the
validity of the assessment is in question, and not its reasonableness or date of receipt of such appeal. The Board, after hearing, shall render its decision based on
correctness, appeals to the LBAA, and subsequently to the CBAA, pursuant substantial evidence or such relevant evidence on record as a reasonable mind might accept as
to Sections 22614 and 22915 of the LGC, are not necessary. 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
11  Id. subpoena and subpoena duces tecum. The proceedings of the Board shall be conducted solely
12  89 Phil. 246 (1951). for the purpose of ascertaining the facts without necessarily adhering to technical rules
13  Id., at p. 248. applicable in judicial proceedings.
14  Section 226. Local Board of Assessment Appeals.—Any owner or person having legal (c)  The secretary of the Board shall furnish the owner of the property or the person
interest in the property who is not satisfied with the action of the provincial, city or municipal having legal interest therein and the provincial or city assessor with a copy of the decision of
assessor in the assessment of his property may, within sixty (60) days from the date of receipt the Board. In case the provincial or city assessor concurs in the revision or the assessment, it
of the written notice of assessment, appeal to the 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
517 person having legal interest therein or the assessor who is not satisfied with the decision of the
VOL. 741, NOVEMBER 517 Board, may, within thirty (30) days after receipt of the decision of said Board, appeal to the
Central Board of Assessment Appeals, as herein provided. The decision of the Central Board
24, 2014 shall be final and executory.
National Power Corporation 16  321 Phil. 81; 250 SCRA 500 (1995).
vs. Municipal Government of 518
Navotas 518 SUPREME COURT
REPORTS ANNOTATED
Stated differently, in the event that the taxpayer questions the
National Power Corporation
authority and power of the assessor to impose the assessment, and of the
vs. Municipal Government of
treasurer to collect the real property tax, resort to judicial action may
prosper. This is in consonance with the ruling in Ty v. Trampe.16 Here, a Navotas
petition for prohibition with prayer for a restraining order and/or writ of of administrative remedies and nonpayment of the real property tax, the
preliminary injunction was filed to declare null and void the new tax Court gave due course to the case on the ground that the controversy did
not involve questions of fact but only of law. Thus:

7|Page
 Respondents argue that this case is premature because petitioners neither In the case at bar, the claim of petitioner essentially questions the very
appealed the questioned assessments on their properties to the Board of authority and power of the Municipal Assessor to impose the assessment
Assessment Appeal, pursuant to Sec. 226, nor paid the taxes under protest, per and of the Municipal Treasurer to collect the real property tax with respect
Sec. 252. to the machineries and equipment located in the Navotas I and II power
We do not agree. Although as a rule, administrative remedies must first be
plants. Certainly, it does not pertain to the correctness of the amounts
exhausted before resort to judicial action can prosper, there is a well-settled
assessed but attacks the validity of the assessment of the taxes itself.
exception in cases where the controversy does not involve questions of fact but
only of law. In the present case, the parties, even during the proceedings in the The well-established rule is that the allegations in the complaint and
lower court on 11 April 1994, already agreed “that the issues in the petition are the character of the relief sought determine the nature of an action. 18 Here,
legal,” and thus, no evidence was presented in said court. it is not disputed that the machineries and equipment are being used for
In laying down the powers of the Local Board of Assessment Appeals, R.A. power generation. The primordial issue, however, is whether these
7160 provides in Sec. 229(b) that “(t)he proceedings of the Board shall be machineries and equipment are actually, directly and exclusively used by
conducted solely for the purpose of ascertaining the facts . . . .” It follows that petitioner within the purview of Section 234 19 of the LGC, which exempts it
appeals to this Board may be fruitful only where questions of fact are involved. from payment of real property taxes, to wit:
Again, the protest contemplated under Sec. 252 of R.A. 7160 is needed where Section 234. Exemptions from Real Property Tax.—The following are
there is a question as to the reasonableness of the amount assessed. Hence, if a exempted from payment of the real property tax:
taxpayer disputes the reasonableness of an increase in a real estate tax (a) Real property owned by the Republic of the Philippines or any of its
assessment, he is required to “first pay the tax” under protest. Otherwise, the city political subdivisions except when the beneficial use thereof has been granted,
or municipal treasurer will not act on his protest. In the case at bench, however, for consideration or otherwise, to a taxable person;
the petitioners are questioning the very authority and power of the assessor,
acting solely and independently, to impose the assessment and of the treasurer _______________
to collect the tax. These are not questions
17  Id., at pp. 101-102; pp. 518-519. (Emphasis supplied)
519 18  Olivares v. Marquez, 482 Phil. 183, 191; 438 SCRA 679, 685-686 (2004).
19  Emphasis supplied.
VOL. 741, NOVEMBER 519
24, 2014 520
National Power Corporation 520 SUPREME COURT
vs. Municipal Government of REPORTS ANNOTATED
Navotas National Power Corporation
merely of amounts of the increase in the tax but attacks on the very validity vs. Municipal Government of
of any increase.17
Navotas
(b) Charitable institutions, churches, parsonages or convents appurtenant
  thereto, mosques, nonprofit or religious cemeteries and all lands, buildings, and
Accordingly, if the only issue is the legality or validity of the assessment improvements actually, directly, and exclusively used for religious, charitable or
— a question of law — direct recourse to the RTC is warranted. educational purposes;
8|Page
 (c) All machineries and equipment that are actually, directly and exclusively There is no dispute that Section 234 of the Local Government Code exempts
used by local water districts and government owned or controlled corporations petitioner from payment of real property tax due on its machineries located at
engaged in the supply and distribution of water and/or generation and MNC-1 and MNC-2 power stations. 20

transmission of electric power;

(d) All real property owned by duly registered cooperatives as provided for  
under R.A. No. 6938; and The foregoing was not disputed by respondents.
(e) Machinery and equipment used for pollution control and environmental Despite this, the RTC still dismissed the petition on the ground of lack of
protection. jurisdiction for failure of petitioner to appeal the assailed assessment to
Except as provided herein, any exemption from payment of real property tax the LBAA and the CBAA.
previously granted to, or presently enjoyed by, all persons, whether natural or More, we find it obscure that the CTA En Banc, while finding that the
juridical, including all government-owned or -controlled corporations are hereby issue obtaining in the present case pertains to a question of fact, held
withdrawn upon the effectivity of this Code.
that Ty is applicable to the present case with respect to the requirement
  for payment under protest, to wit:
As can be gleaned from the foregoing, the issue is clearly legal given If the legality of the real property tax assessment is at issue, the well
pronounced ruling and ratiocination made by the Supreme Court in the case of Ty
that it involves an interpretation of the contract between the parties vis-à-
v. Trampe is applicable. There, the Supreme Court notes:
vis the applicable laws, i.e., which entity actually, directly and exclusively
Again, the protest contemplated under Sec. 252 of R.A. 7160 is needed where
uses the subject machineries and equipment. The answer to such question there is a question as to the reasonableness of the amount assessed. Hence, if a
would then determine whether petitioner is indeed exempt from payment taxpayer disputes the reasonableness of an increase in a real estate tax
of real property taxes. Since the issue is a question of law, the jurisdiction assessment, he is required to “first pay the tax” under protest. Otherwise, the city
was correctly lodged with the RTC. or municipal treasurer will not act on his protest. In the case at bench however,
On this score, it is worthy to note that in its Decision dated March 23, the petitioners are questioning the very authority and power of the assessor,
2007, the RTC already declared that petitioner is exempt from payment of acting solely and independently, to impose the assessment and of the treasurer
real property taxes on its machiner- to collect the tax. These are not questions merely of amounts of the in-
  _______________
521
VOL. 741, NOVEMBER 521 20  Records, p. 41.
24, 2014
522
National Power Corporation 522 SUPREME COURT
vs. Municipal Government of REPORTS ANNOTATED
Navotas National Power Corporation
ies located at MNC-I & MNC-II, the pertinent portion of which reads:
vs. Municipal Government of
Navotas
9|Page
crease in the tax but attacks on the very validity of any increase. Navotas
In a similar way, as there has been an apparent admission by petitioner that protest no longer necessary given the availing circumstances of the case. If
it is not questioning the excessiveness or reasonableness of the real property tax
indeed the Court a quo finds the present case to fall under the jurisdiction
assessment, but the legality thereof; there is no need for petitioner to pay the
of the LBAA, and then the CBAA on appeal, the dispensation with the
real property tax assessment before initiating a protest.
At this point, although we agree with petitioner on it stance that payment requirement of payment under protest would be devoid of merit and
under protest is not necessary, we still maintain the view that exhausting the contrary to law and jurisprudence.
available remedies of lodging an appeal before the LBAA and CBAA before It is for the foregoing reasons that we deem the reversal of the ruling of
availing judicial intervention is still mandatory. 21 the CTA En Banc in order. At the risk of repetition, what is being
questioned in the present case is the authority of the Municipal Assessor
  to impose the assessment and of the Municipal Treasurer to collect the
We find the reasoning of the CTA En Banc quite illogical. For one, it held real property taxes. Accordingly, resort to the LBAA and the CBAA is no
that unlike Ty, the resolution of the question of law submitted by longer necessary for the same reason that what is being questioned is the
petitioner requires proof of facts; 22 hence, resort to the LBAA is necessary. legality or validity of the tax assessment, not the reasonableness or
However, instead of sustaining the requirement of payment under protest correctness of the assessment. Certainly, it would be unjust to require the
under Section 25223 of the LGC, the CTA En Banc found the payment of realty owner to first pay the tax, the validity of which he precisely
_______________
questions, before he can lodge a complaint to the court.
21  Id., at pp. 73-74. (Emphasis ours) In fine, if a taxpayer is not satisfied with the decision of the CBAA or the
22  Id., at p. 75. RTC, as the case may be, the taxpayer may file, within thirty (30) days from
23  Section 252. Payment under Protest.—(a)  No protest shall be entertained unless receipt of the assailed decision, a petition for review with the CTA pursuant
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
to Section 7(a) of R.A. 9282. In cases where the question involves the
tax to the provincial, city treasurer or municipal treasurer, in the case of a municipality within amount of the tax or the correctness thereof, the appeal will be pursuant
Metropolitan Manila Area, who shall decide the protest within sixty (60) days from receipt. to Section 7(a)(5) of R.A. 9282. When the appeal comes from a judicial
(b) The tax or a portion thereof paid under protest, shall be held in trust by the treasurer remedy which questions the authority of the local government to impose
concerned.
(c)  In the event that the protest is finally decided in favor of the taxpayer, the amount or
the tax, Section 7(a)(3) of R.A. 9282 applies. Thereafter, such decision,
portion of the tax protested shall be refunded to the protestant, or applied as tax credit ruling or resolution may be further reviewed by the CTA En Banc pursuant
against his existing or future tax liability. to Section 2, Rule 4 of the Revised Rules of the CTA, to wit:
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523
VOL. 741, NOVEMBER 523 (d) In the event that the protest is denied or upon the lapse of the sixty-day period
24, 2014 prescribed in subparagraph (a), the taxpayer may avail of the remedies as provided for in
Chapter 3, Title II, Book II of this Code.
National Power Corporation
vs. Municipal Government of 524
524 SUPREME COURT
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 REPORTS ANNOTATED 525

National Power Corporation VOL. 741, NOVEMBER 525

vs. Municipal Government of 24, 2014
Navotas National Power Corporation
Section 2. Cases Within the Jurisdiction of the Court En Banc.—The Court En vs. Municipal Government of
Banc shall exercise exclusive appellate jurisdiction to review by appeal the Navotas
following: SO ORDERED.
(a) Decisions or resolutions on motions for reconsideration or new trial of the Velasco, Jr. (Chairperson), Villarama, Jr., Mendoza ** and Jardeleza, JJ.,
Court in Divisions in the exercise of its exclusive appellate jurisdiction over: concur.
x x x x
(2) Local tax cases decided by the Regional Trial Courts in the exercise of Petition granted, judgment and resolution set aside.
their original jurisdiction;
x x x
24
Notes.—The Court of Tax Appeals (CTA) has exclusive appellate
jurisdiction to review on appeal decisions of the Commissioner of Internal
  Revenue (CIR) in cases involving refunds of internal revenue taxes. (Silicon
Thus, the CTA En Banc erred in dismissing the petition for review En Philippines, Inc. vs. Commissioner of Internal Revenue, 717 SCRA 30 [2014])
Banc, and affirming the CTA Second Division’s position that the RTC has no The Court of Tax Appeals (CTA) is a court of special jurisdiction. As such,
jurisdiction over the instant case for failure of petitioner to exhaust it can only take cognizance of such matters as are clearly within its
administrative remedies which resulted in the finality of the assessment. jurisdiction. (Commissioner of Internal Revenue vs. Silicon Philippines, Inc.
Anent the matter on the validity of the Notices of Delinquency issued by [formerly Intel Philippines Manufacturing, Inc.], 718 SCRA 513 [2014])
the Municipal Treasurer, as well as the Warrant of Levy, the same involves ——o0o——
questions of fact. Thus, the remand of this case to the RTC is warranted for
the proper verification and determination of the factual basis and merits of _______________
this case, and in order that the ends of substantial justice and fair play may
* * Designated acting member, in lieu of Associate Justice Bienvenido L. Reyes, per Special
be served. Order No. 1878 dated November 21, 2014.
WHEREFORE, the Court GRANTS the petition and SETS ASIDE the
Decision dated March 1, 2010 and Resolution dated May 6, 2010 of the  
Court of Tax Appeals En Banc in E.B. No. 461. Moreover, this case © Copyright 2022 Central Book Supply, Inc. All rights reserved.
is REMANDED to the Regional Trial Court for determination of petitioner’s
claims for annulment of Notice of Delinquency, Warrant of Levy, and
Notice of Sale.
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24  Emphasis supplied.
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