Angeles University V Angeles

Angeles University Foundation v.
City of which cannot be considered as a use exclusively

Angeles for educational activities.
G.R. No. 189999
Petitioner countered that the subject building
June 27, 2012
permit are really taxes considering that they are
Petitioner Angeles University Foundation (AUF) provided under the chapter on "Local
is an educational institution established in 1962 Government Taxation" in reference to the
and was converted into a non-stock, non-profit "revenue raising power" of local government
education foundation under the provisions of units (LGUs). Moreover, petitioner contended
R.A. No. 60554 on December 4, 1975. that, as held in Philippine Airlines, Inc. v. Edu,
fees may be regarded as taxes depending on
In 2005, Petitioner filed with the Office of the
the purpose of its exaction. In any case,
City Building Official an application for a
petitioner pointed out that the Local
building permit for the construction of an 11-
Government Code of 1991 provides in Sec. 193
storey building of the Angeles University
that non-stock and non-profit educational
Foundation Medical Center. Said office issued a
institutions like petitioner retained the tax
Building Permit Fee Assessment in the amount
exemptions or incentives which have been
of P126,839.20. An Order of Payment was also
granted to them. Under Sec. 8 of R.A. No. 6055
issued by the City Planning and Development
and applicable jurisprudence and DOJ rulings,
Office, Zoning Administration Unit requiring
petitioner is clearly exempt from the payment
petitioner to pay the sum of P238,741.64 as
of building permit fees.
Locational Clearance Fee.
ISSUES
Petitioners sent a letter to the Respondents
claiming that they are exempt from the 1) WON petitioner is exempt from the
payment of the building permit and locational payment of building permit and related
clearance fees according to the legal opinions of fees imposed under the National
the DOJ. Despite their plea, Respondents still Building Code as a form of tax; and
maintains that they must pay the building 2) WON the parcel of land owned by
permit and fees. petitioner which has been assessed for
real property tax is likewise exempt.
Consequently, petitioner paid under protest.
After the denial of its request for a refund of the RULING: Petitioner is not entitled to the refund
fees it paid under protest, Petitioner filed a of building permit and related fees, as well as
complaint. real property tax it paid under protest.
Respondent’s answer asserted that the claim of 1. Building permit fees are not charges
petitioner cannot be granted because its on property, they are not
structures are not among those mentioned in impositions from which petitioner is
Sec. 209 of the National Building Code as exempt. They are not considered as
exempted from the building permit fee. Since
taxes.
the disputed assessments are regulatory in
nature, they are not taxes from which petitioner Building permit fees are not impositions on
is exempt. As to the real property taxes imposed property but on the activity subject of
on petitioner’s property located in Marisol government regulation. While it may be argued
Village, respondents pointed out that said that the fees relate to particular properties, i.e.,
premises will be used as a school dormitory buildings and structures, they are actually
imposed on certain activities the owner may 2. No. Petitioner cannot be exempt
conduct either to build such structures or to from payment of real property tax.
repair, alter, renovate or demolish the same.
Section 28(3), Article VI of the 1987 Constitution
Exempted from the payment of building permit provides:
fees are: (1) public buildings and (2) traditional
indigenous family dwellings. Not being expressly (3) Charitable institutions, churches and
included in the enumeration of structures to parsonages or convents appurtenant thereto,
which the building permit fees do not apply, mosques, non-profit cemeteries, and all lands,
petitioner’s claim for exemption rests solely on buildings, and improvements, ACTUALLY,
its interpretation of the term "other charges DIRECTLY, AND EXCLUSIVELY used for religious,
imposed by the National Government" in the charitable or educational purposes shall be
tax exemption clause of R.A. No. 6055. exempt from taxation.
A Charge is the "price of, or rate for, Petitioner failed to discharge its burden to
something," while the word Fee pertains to a prove that its real property is actually, directly
"charge fixed by law for services of public and exclusively used for educational purposes.
officers or for use of a privilege under control of There is no compliance with the constitutional
government." Charges refers to pecuniary and statutory requirement that said real
liability, as rents or fees against persons or property is actually, directly and exclusively
property, while fee means a charge fixed by law used for educational purposes.
or ordinance for the regulation or inspection of What is meant by actual, direct and exclusive
a business or activity. use of the property for charitable purposes is
That "charges" in its ordinary meaning appears the direct and immediate and actual application
to be a general term which could cover a of the property itself to the purposes for which
specific "fee" does not support petitioner’s the charitable institution is organized. It is not
position that building permit fees are among the use of the income from the real property
those "other charges" from which it was that is determinative of whether the property is
expressly exempted. Note that the "other used for tax-exempt purposes
charges" mentioned in Sec. 8 of R.A. No. 6055 is
qualified by the words "imposed by the
Government on all x x x property used
exclusively for the educational activities of the
foundation."
"The conservative and pivotal distinction between
these two powers (TAX and POLICE POWER) rests in
the purpose for which the charge is made. If
generation of revenue is the primary purpose and
regulation is merely incidental, the imposition is a
tax; but if regulation is the primary purpose, the fact
that revenue is incidentally raised does not make the
imposition a tax.” (Gerochi v. Dept. of Energy) Take
note

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Angeles University Foundation v.

City of which cannot be considered as a use exclusively

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