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    Fels Energy Inc V Batangas

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    Arrow Pabiona
    This case involves a dispute over real property tax (RPT) assessments on power barges owned by Fels Energy but leased to the National Power Corporation (NPC). The key issues are: (1) whether Fels' appeal of the RPT assessment was timely filed; and (2) whether Fels or NPC is liable to pay the RPT. The Supreme Court ultimately ruled that Fels' appeal was not timely because it was filed after the mandatory 60-day period, and that Fels as the owner of the property is liable to pay the RPT, not NPC.

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    Fels Energy Inc V Batangas

    Uploaded by

    Arrow Pabiona
    120 views2 pages
    This case involves a dispute over real property tax (RPT) assessments on power barges owned by Fels Energy but leased to the National Power Corporation (NPC). The key issues are: (1) whether Fels' appeal of the RPT assessment was timely filed; and (2) whether Fels or NPC is liable to pay the RPT. The Supreme Court ultimately ruled that Fels' appeal was not timely because it was filed after the mandatory 60-day period, and that Fels as the owner of the property is liable to pay the RPT, not NPC.

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    Fels Energy Inc v Batangas

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    This case involves a dispute over real property tax (RPT) assessments on power barges owned by Fels Energy but leased to the National Power Corporation (NPC). The key issues are: (1) whether Fels' appeal of the RPT assessment was timely filed; and (2) whether Fels or NPC is liable to pay the RPT. The Supreme Court ultimately ruled that Fels' appeal was not timely because it was filed after the mandatory 60-day period, and that Fels as the owner of the property is liable to pay the RPT, not NPC.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    120 views2 pages

    Fels Energy Inc V Batangas

    Uploaded by

    Arrow Pabiona
    This case involves a dispute over real property tax (RPT) assessments on power barges owned by Fels Energy but leased to the National Power Corporation (NPC). The key issues are: (1) whether Fels' appeal of the RPT assessment was timely filed; and (2) whether Fels or NPC is liable to pay the RPT. The Supreme Court ultimately ruled that Fels' appeal was not timely because it was filed after the mandatory 60-day period, and that Fels as the owner of the property is liable to pay the RPT, not NPC.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 2

    FELS ENERGY INC.

    V PROVINCE OF BATANGAS
    Petitioner: Fels Energy, Inc | National Power Corporation
    Respondent: Province of Batangas and Provincial Assessor |
    LBAA-Batangas, Lauro Andaya (Assessor) and Province of
    Batangas
    Summary: NPC and Polar Energy entered into a lease contract
    over power barges, with an undertaking that NPC will pay the
    taxes. Polar assigned its rights to Fels. Fels was assessed RPT by
    the Province of Batangas. NPC, in behalf of FELS, moved to
    reconsider the assessment instead of appealing straight to the
    LBAA. The parties appealed all the way to the SC but the SC
    upheld the assessment and ruled that FELS, not NPC is liable.
    Doctrine: The 60-day period to appeal to the LBAA is reckoned
    from the date of receipt of the notice of assessment. If a
    taxpayer fails to appeal in due course, the right of the LGU to
    collect taxes due with respect to the taxpayers property
    becomes absolute upon the expiration of the period to appeal.
    FACTS:
    1. 1993: NPC entered into a lease contract denominated as an
    Energy Conversion Agreement with Polar Energy over
    3x30MW diesel engine power barges for a period of 5 years.
    2. Article 10 of the Agreement: NAPOCOR shall be responsible
    for the payment of (a) all taxes, import duties, fees, charges
    and other levies imposed by the National Government of the
    Republic of the Philippines or any agency or instrumentality
    thereof to which POLAR may be or become subject to or in
    relation to the performance of their obligations under this
    agreement (other than (i) taxes imposed or calculated on
    the basis of the net income of POLAR and Personal Income
    Taxes of its employees and (ii) construction permit fees,
    environmental permit fees and other similar fees and
    charges) and (b) all real estate taxes and assessments,
    rates and other charges in respect of the Power Barges.
    3. Polar then assigned its rights to FELS. On August 7,1995,
    FELS received an assessment for real property taxes on the
    power barges for P56, 184, 088.40 per annum.
    FELS
    reminded NPC of its obligation under the Agreement and
    gave it full authority to represent FELS in any conference
    regarding the assessment.
    4. On September 7, 1995, NPC sought reconsideration of the
    assessment but the Provincial Assessor denied. NPC

    appealed to the LBAA for the setting aside of the


    assessment and the declaration of the barges as nontaxable items.
    - Assessor: barges were real property for purposes of
    taxation under Sec 199c of the LGC
    - NPC: based on the DOF Opinion dated May 20, 1996,
    power barges are not real property subject to real
    property assessment
    5. LBAA: Petition denied. FELS is ordered to pay. Power
    plant facilities are considered real property because they are
    installed at a specific location with a character of
    permanency. In any case, the petition was filed out of time.
    6. FELS appealed to the CBAA. Meanwhile, the Provincial
    Treasurer issued a Notice of Levy and Warrant of Distraint,
    which was served to FELS. The CBAA issued an Order lifting
    the levy and distraint.
    7. Meanwhile, the NPC filed a Motion for Intervention, which
    was approved.
    8. CBAA: Reversed. The barges are exempt from RPT
    because they are owned by NPC and were actually, directly
    and exclusively used by it.
    9. CBAA on MR: Reversed. Petition is dismissed. LBAA is
    affirmed.
    10. FELS and NPC filed separate petitions for review before the
    CA. The parties were required to filed their respective
    Memoranda but tey filed to do so even after a year.
    11. CA: Denied. The right to question the assessment has
    prescribed.
    12. FELS and NPC: the appeal to the LBAA was not time-barred;
    the running of the period was tolled when NPC moved for
    the reconsideration of the assessment; the 60-day period for
    the appeal should be reckoned from its receipt of the denial
    of its MR
    ISSUE: WON FELS is liable to pay RPT YES
    RULING: DENIED
    RATIO:
    1. The 60-day period is reckoned from
    the date of
    receipt of the assessment notice
    a. Sec 226 of the LGC: appeal to the LBAA within 60
    days from receipt of the written notice of assessment

    b. The assessment sent to FELS contained the same


    provision but NPC opted to file a MR, which is a
    remedy not sanctioned by law
    2. In Callanta v Ombudsman, the court ruled that the last
    action of the local assessor on a particular
    assessment shall be the notice of assessment; it is
    this last action which gives the owner of the property the
    right to appeal to the LBAA. The procedure likewise does not
    permit the property owner the remedy of filing a motion for
    reconsideration before the local assessor.
    - Perfection of an appeal within the period is both
    mandatory and jurisdictional, and failure in this regard
    renders the decision final and executory.
    3. Power barges = real property subject to RPT
    - Art 415 (9) of the New Civil Code provides that docks
    and structures which, though floating, are intended by
    their nature and object to remain at a fixed place are
    considered immovable property (by destination)
    4. FELS is the owner of the property and is the taxable
    entity
    - Clear stipulation of ownership in the Agreement; FELS
    cannot invoke the exemption under the LGC for

    properties actually, directly and exclusively used by


    GOCCs
    - The Agreement stipulates that Polar will operate the
    power barges, not NPC; the privilege granted to NPC
    cannot be extended to FELS
    - The covenant between FELS and NPC does not bind the
    Province, which is not privy to it.
    5. Res Judicata: FELS gave NPC the full power and
    authority to represent it in any proceeding regarding real
    property assessment. Therefore, when petitioner NPC filed
    its petition for review docketed as G.R. No. 165113, it did so
    not only on its behalf but also on behalf of FELS. Thus, the
    decision in G.R. No. 165116 is binding on petitioner FELS
    under the principle of privity of interest. In fine, FELS and
    NPC are substantially identical parties as to warrant the
    application of res judicata.
    6. Forum Shopping: Petitioners engaged in forum shopping
    when they filed G.R. Nos. 168557 and 170628 after the
    petition for review in G.R. No. 165116. Indeed, petitioners
    went from one court to another trying to get a favorable
    decision from one of the tribunals which allowed them to
    pursue their cases.

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