6 Republic Vs City of Paranaque Digest GR No 191109

LGC SEC. 234. Exemptions from Real Property Tax and SEC. 133.
Common Limitations on the

Taxing Po ers of Lo!al Go"ernment #nits
G.R. $o. 1%11&% '(ly 1)* 2&12
REP#+L,C - T/E P/,L,PP,$ES* represented 0y the P/,L,PP,$E RECL T,-$

#T/-R,T PR 5*Petitioner,
vs.
C,T - P R $ 6#E* Respondent.
This is a petition for review on certiorari assailing the Order of the Regional Trial Court, Branch
195,Paranaque Cit !RTC", which ruled that petitioner Philippine Recla#ation $uthorit !PR$" is
a govern#ent%owned and controlled corporation !&OCC", a ta'a(le entit , and, therefore, not
e'e#pt fro# pa #ent of real propert ta'es.
The Pu(lic )states $uthorit !P)$" is a govern#ent corporation created ( virtue of P.*. +o.
1 - toprovide a coordinated, econo#ical and efficient recla#ation of lands, and the
ad#inistration andoperation of lands (elonging to, #anaged and/or operated ( , the
govern#ent with the o(0ect of #a'i#i ing their utili ation and hastening their develop#ent
consistent with pu(lic interest.
On Octo(er 23, 2 , then President &loria 4acapagal%$rro o issued ).O. +o. -
transfor#ing P)$ into PR$, which shall perfor# all the powers and functions of the P)$ relating
to recla#ation activities.
B virtue of its #andate, PR$ reclai#ed several portions of the foreshore and offshore areas
of4anila Ba ,including those located in Para6aque Cit . Para6aque Cit Treasurer issued
7arrants of 8ev on PR$ s reclai#ed properties (ased on the assess#ent for delinquent real
propert for ta' ears 2 1 and 2 2.
PR$ clai#ed that it is not a &OCC under the $d#inistrative Code, nor is it a &OCC under
:ection 13, $rticle ;<< of the 19-=Constitution (ecause it is not required to #eet the test
ofecono#icvia(ilit .
<t is a govern#ent instru#entalit vested with corporate powers and perfor#ing an essential
pu(lic service. <t insists that it #a not (e classified as a non%stoc> corporation (ecause it has
no #e#(ers and it is not organi ed for charita(le, religious, educational, professional, cultural,
recreational, fraternal, literar , scientific, social, civil service, or si#ilar purposes, li>e trade,
industr , agriculture and li>e cha#(ers as provided in :ection -- of the Corporation Code.
Thus, PR$ insists that, as an incorporated instru#entalit of the +ational &overn#ent, it is

e'e#pt fro# pa #ent of real propert ta' e'cept when the (eneficial use of the real propert is
granted to a ta'a(le person. PR$ clai#s that (ased on :ection 1 !o" of the 8&C, local
govern#ents cannot ta' the national govern#ent which delegate to local govern#ents the
power to ta'.
,ss(e7
7hether or not Philippine Recla#ation $uthorit !PR$" is an incorporated instru#entalit of the

national govern#ent and is, therefore, e'e#pt fro# pa #ent of real propert ta' under sections
2 !a" and 1 !o" of Repu(lic $ct =13 ?
/eld7
@es it is a &overn#ent <nstru#entalit .
<n the case at (ench, PR$ is not a &OCC (ecause it is neither a stoc> nor a non%stoc>
corporation. <t cannot (e considered as a stoc> corporation (ecause although it has a capital
stoc> divided into no par value shares as provided in :ection = of P.*. +o. 1 - , it is not
authori ed to distri(ute dividends, surplus allot#ents or profits to stoc>holders. PR$ is a
govern#ent instru#entalit vested with corporate powers and perfor#ing an essential pu(lic
service pursuant to :ection 2!1 " of the <ntroductor Provisions of the $d#inistrative Code.
Being an incorporated govern#ent instru#entalit , it is e'e#pt fro# pa #ent of real propert
ta'.
4an govern#ent instru#entalities are vested with corporate powers (ut the do not (eco#e
stoc> or non%stoc> corporations, which is a necessar condition (efore an agenc
or instru#entalit is dee#ed a &OCC. The funda#ental provision a(ove authori es Congress to
create &OCCs through special charters on two conditionsA 1" the &OCC #ust (e esta(lished forthe
co##on good and 2" the &OCC #ust #eet the test of econo#ic via(ilit . <n this case, PR$ #a
have passed the first condition of co##on good (ut failed the second one % econo#ic
via(ilit . ndou(tedl , the purpose (ehind the creation of PR$ was not for econo#ic orco##ercial
activities.
Clearl , respondent has no valid or legal (asis in ta'ing the su(0ect reclai#ed lands #anaged
( PR$. On the other hand, :ection 2 !a" of the 8&C, in relation to its :ection 1 !o",
e'e#pts PR$ fro# pa ing realt ta'es and protects it fro# the ta'ing powers of local
govern#ent units.
:ection 2 !a" of the 8ocal &overn#ent Code states that real propert owned ( the Repu(lic
of the Philippines !the Repu(lic" is e'e#pt fro# real propert ta' unless the (eneficial use
thereof has (een granted to a ta'a(le person.
:ection 1 of the 8ocal &overn#ent Code states that Dunless otherwise providedD in the Code,
local govern#ents cannot ta' national govern#ent instru#entalities.
<n this case, there is no proof that PR$ granted the (eneficial use of the su(0ect reclai#ed lands
to a ta'a(le entit . There is no showing on record either that PR$ leased the su(0ect reclai#ed
properties to a private ta'a(le entit .
8/ERE -RE* the petition is GR $TE9. The Order of the Regional Trial Court, Branch 195,
Para6aque Cit , is RE:ERSE9 and SET S,9E.

6 Republic Vs City of Paranaque Digest GR No 191109

Uploaded by

Copyright:

Available Formats

6 Republic Vs City of Paranaque Digest GR No 191109

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

6 Republic Vs City of Paranaque Digest GR No 191109

Uploaded by

Copyright:

Available Formats

LGC SEC. 234. Exemptions from Real Property Tax and SEC. 133.

Common Limitations on the

G.R. $o. 1%11&% '(ly 1)* 2&12

REP#+L,C - T/E P/,L,PP,$ES* represented 0y the P/,L,PP,$E RECL T,-$

Thus, PR$ insists that, as an incorporated instru#entalit of the +ational &overn#ent, it is

7hether or not Philippine Recla#ation $uthorit !PR$" is an incorporated instru#entalit of the

@es it is a &overn#ent <nstru#entalit .

You might also like