Subject: Taxation II

Doctrine: The CTA has exclusive jurisdiction over a special civil action for certiorari assailing an interlocutory
order issued by the RTC in a local tax case.
Topic: IX. JUDICIAL REMEDIES
Digester: Cañedo, PL.
_____________________________________________________________________________________
G.R. No. 196278 June 17, 2015
CE Casecnan Water and Energy Company vs. Province of Nueva Ecija, et al.
DEL CASTILLO, J.:

SUMMARY:
Petitioner CE Casecnan Water and Energy Company, Inc. and NIA entered into a BOT contract for the construction
and development of the Casecnan Multi-Purpose Irrigation and Power Project. Petitioner received from the Office
of the Provincial Assessor a Notice of Assessment of Real Property Tax (RPT). Later on, petitioner received a RPT
Reassessment and demanding payment thereof. Hence, petitioner filed with the RTC of San Jose City, Nueva Ecija
a Complaint for injunction and damages with application for TRO and preliminary injunction praying to restrain
the collection of the 2008 RPT Reassessment. When the case was appealed to CA, it dismissed the case for lack of
jurisdiction because the jurisdiction over the case lies within the CTA.

WON it is the CTA, not the CA, which has the power to rule on a Petition for Certiorari assailing an interlocutory
order of the RTC relating to a local tax case. (YES)

With respect to the CTA, its jurisdiction was expanded and its rank elevated to that of a collegiate court with
special jurisdiction by virtue of Republic Act No. 9282. This expanded jurisdiction of the CTA includes its exclusive
appellate jurisdiction to review by appeal the decisions, orders or resolutions of the RTC in local tax cases originally
decided or resolved by the RTC in the exercise of its original or appellate jurisdiction.

The CTA likewise has the jurisdiction to issue writs of certiorari or to determine whether there has been grave
abuse of discretion amounting to lack or excess of jurisdiction on the part of the RTC in issuing an interlocutory
order in cases falling within the CTA’s exclusive appellate jurisdiction

Facts:

1. Petitioner CE Casecnan Water and Energy Company, Inc. and the National Irrigation Administration (NIA)
entered into a build-operate-transfer (BOT) contract known as the "Amended and Restated Casecnan
Project Agreement” (Casecnan Contract) relative to the construction and development of the Casecnan
Multi-Purpose Irrigation and Power Project (Casecnan Project) in Pantabangan, Nueva Ecija and Alfonso
Castaneda, Nueva Vizcaya. On September 29, 2003, petitioner and NIA executed a Supplemental
Agreement amending Article II of the Casecnan Contract which pertains to payment of taxes.
a. Article 2.2 thereof states that NIA must reimburse petitioner for real property taxes (RPT)
provided the same was paid upon NIA’s directive and with the concurrence of the Department of
Finance.
2. On September 6, 2005, petitioner received from the Office of the Provincial Assessor a Notice of
Assessment of Real Property Tax (RPT). Petitioner assailed the assessment with the Nueva Ecija Local
Board of Assessment Appeals (Nueva Ecija LBAA) which dismissed it.
 3. Petitioner filed a Notice of Appeal with the Nueva Ecija Central Board of Assessment Appeals (Nueva Ecija
CBAA).
4. During the pendency thereof, respondents collected from petitioner the RPT due under the said
assessment as well as those pertaining to the years 2006 up to the second quarter of 2008, totalling
₱363,703,606.88. Petitioner paid the assessed RPT under protest. Thereafter, petitioner received a letter
from the Office of the Provincial Treasurer stating that it has RPT in arrears which amounted to
₱1,279,997,722.70 (2008 RPT Reassessment). Again, petitioner questioned this assessment through an
appeal before the Nueva Ecija LBAA.
5. While the same was pending, petitioner received from respondents a letter dated September 10, 2008
demanding payment for its alleged RPT arrearages.
6. Hence, petitioner filed with the RTC of San Jose City, Nueva Ecija a Complaint for injunction and damages
with application for temporary restraining order (TRO) and preliminary injunction praying to restrain
the collection of the 2008 RPT Reassessment. Petitioner said that it was not the one which should pay
the taxes but NIA.
7. RTC: denied petitioner’s application for a 72-hour TRO. Petitioner filed on September 29, 2008 an
Amended Complaint asking the RTC to likewise enjoin respondents from collecting RPT based on the 2008-
3Q Assessment in the amount of ₱53,346,755.18. The RTC issued a 20-day TRO enjoining respondents
from collecting from petitioner the RPT. Subsequently, however, the RTC denied petitioner’s application
for writ of preliminary injunction and also denied petitioner’s Motion for Reconsideration.
8. CA: Dismissed for lack of jurisdiction. The jurisdiction over the case lies within the CTA.

Issue:
WON it is the CTA, not the CA, which has the power to rule on a Petition for Certiorari assailing an
interlocutory order of the RTC relating to a local tax case.

Ruling:
Yes, it is the CTA which has the power to rule on a Petition for Certiorari assailing an interlocutory order
of the RTC relating to a local tax case.

With respect to the CTA, its jurisdiction was expanded and its rank elevated to that of a collegiate court with
special jurisdiction by virtue of Republic Act No. 9282. This expanded jurisdiction of the CTA includes its exclusive
appellate jurisdiction to review by appeal the decisions, orders or resolutions of the RTC in local tax cases originally
decided or resolved by the RTC in the exercise of its original or appellate jurisdiction.

In the recent case of City of Manila v. Grecia-Cuerdo, the Court ruled that the CTA likewise has the jurisdiction to
issue writs of certiorari or to determine whether there has been grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of the RTC in issuing an interlocutory order in cases falling within the CTA’s
exclusive appellate jurisdiction,

A grant of appellate jurisdiction implies that there is included in it the power necessary to exercise it effectively,
to make all orders that will preserve the subject of the action, and to give effect to the final determination of the
appeal. It carries with it the power to protect that jurisdiction and to make the decisions of the court thereunder
effective. The court, in aid of its appellate jurisdiction, has authority to control all auxiliary and incidental matters
necessary to the efficient and proper exercise of that jurisdiction. For this purpose, it may, when necessary,
prohibit or restrain the performance of any act which might interfere with the proper exercise of its rightful
jurisdiction in cases pending before it. Given these, it is settled that it is the CTA which has exclusive jurisdiction
over a special civil action for certiorari assailing an interlocutory order issued by the RTC in a local tax case.

The RTC injunction case is a local tax case.

Petitioner argues that the injunction case it filed with the RTC is not a local tax case but an ordinary civil action.

The Court finds, however, that in praying to restrain the collection of RPT, petitioner also implicitly questions the
propriety of the assessment of such RPT. This is because in ruling as to whether to restrain the collection, the RTC
must first necessarily rule on the propriety of the assessment. In other words, in filing an action for injunction to
restrain collection, petitioner was in effect also challenging the validity of the RPT assessment.
No doubt, the injunction case before the RTC is a local tax case.
FULL TEXT

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 196278 June 17, 2015

CE CASECNAN WATER and ENERGY COMPANY, INC., Petitioner,

vs.
THE PROVINCE OF NUEVA ECIJA, THEOFFICEOFTHEPROVINCIAL ASSESSOR OF NUEVA ECIJA,
and THEOFFICEOFTHEPROVINCIAL TREASURER OF NUEVA ECIJA, as represented by HON.
AURELIO UMALI, HON. FLORANTE FAJARDO and HON. EDILBERTO PANCHO, respectively, or their
lawful successors, Respondents,
NATIONAL IRRIGATION ADMINISTRATION and DEPARTMENT OF FINANCE, As Necessary Parties.

DECISION

DEL CASTILLO, J.:

The Court of Tax Appeals (CTA) has exclusive jurisdiction over a special civil action for certiorari assailing
an interlocutory order issued by the Regional Trial Court (RTC) in a local tax case.

This Petition for Review on Certiorari1 assails the November 2, 2010 Decision2 of the Court of Appeals (CA)
in CA-GR SP No. 108441 which dismissed for lack of jurisdiction the Petition for Certiorari of petitioner CE
Casecnan Water and Energy Company, Inc.(petitioner) against the Province of Nueva Ecija, the Office of
the Provincial Assessor of Nueva Ecija (Office of the Provincial Assessor) and the Office of the Provincial
Treasurer of Nueva Ecija (Office of the Provincial Treasurer) (respondents). Also assailed is the March 24,
2011 Resolution3 of the CA denying petitioner’s Motion for Reconsideration.4

Factual Antecedents

On June 26, 1995, petitioner and the National Irrigation Administration (NIA) entered into a build-operate-
transfer (BOT) contract known as the "Amended and Restated Casecnan Project Agreement"5 (Casecnan
Contract) relative to the construction and development of the Casecnan Multi-Purpose Irrigation and Power
Project (Casecnan Project) in Pantabangan, Nueva Ecija and Alfonso Castaneda, Nueva Vizcaya. The
Casecnan Project is a combined irrigation and hydroelectric power generation facility using the Pantabangan
Dam in Nueva Ecija. On September 29, 2003, petitioner and NIA executed a Supplemental
Agreement6 amending Article II of the Casecnan Contract which pertains to payment of taxes. Article 2.2
thereof states that NIA must reimburse petitioner for real property taxes (RPT) provided the same was paid
upon NIA’s directive and with the concurrence of the Department of Finance.

On September 6, 2005, petitioner received from the Office of the Provincial Assessor a Notice of
Assessment of Real Property dated August 2, 2005, which indicates that for the years 2002 to 2005, its RPT
due was 248,676,349.60. Petitioner assailed the assessment with the Nueva Ecija Local Board of
Assessment Appeals (Nueva Ecija LBAA) which dismissed it on January 26, 2006. Undeterred, petitioner
filed a Notice of Appeal with the Nueva Ecija Central Board of Assessment Appeals (Nueva Ecija CBAA).
During the pendency thereof, respondents collected from petitioner the RPT due under the said assessment
as well as those pertaining to the years 2006 up to the second quarter of 2008, totalling ₱363,703,606.88.
Petitioner paid the assessed RPT under protest; it also initiated proceedings questioning the validity of the
collection with respect to the years 2006 up to the second quarter of 2008. Thereafter, petitioner received a
letter7 dated July 9, 2008 from the Office of the Provincial Treasurer stating that it has RPT in arrears for the
years 2002 up to the second quarter of 2008 amounting to ₱1,277,474,342.10. Petitioner received another
letter8 dated August 29, 2008 from the same office clarifying that its arrearages in RPT actually amounted to
₱1,279,997,722.70 (2008 RPT Reassessment). Again, petitioner questioned this assessment through an
appeal before the Nueva Ecija LBAA. While the same was pending, petitioner received from respondents a
letter dated September 10, 2008 demanding payment for its alleged RPT arrearages.

Hence, on September 23, 2008, petitioner filed with the RTC of San Jose City, Nueva Ecija a Complaint9 for
injunction and damages with application for temporary restraining order (TRO) and preliminary
injunction10 praying to restrain the collection of the 2008 RPT Reassessment. Petitioner emphasized, among
others, that it was not the one which should pay the taxes but NIA.

Ruling of the Regional Trial Court

On September 24, 2008, the RTC denied petitioner’s application for a 72-hour TRO.11 Meanwhile, petitioner
received from the Office of the Provincial Treasurer a letter dated September 22, 2008 further demanding
payment for RPT covering the third quarter of 2008 (2008-3Q Assessment). Thus, petitioner filed on
September 29, 2008 an Amended Complaint12 asking the RTC to likewise enjoin respondents from collecting
RPT based on the 2008-3Q Assessment in the amount of ₱53,346,755.18.

On October 2, 2008, the RTC issued a 20-day TRO13 enjoining respondents from collecting from petitioner
the RPT covered by the 2008 RPT Reassessment amounting to ₱1,279,997,722.70, including surcharges
and penalties.

Subsequently, however, the RTC denied petitioner’s application for writ of preliminary injunction in its
Order14 of October 24, 2008.It also denied petitioner’s Motion for Reconsideration thereof in an Order15 dated
January 30, 2009.

On April 24, 2009, petitioner filed with the CA a Petition for Certiorari16 under Rule 65 of the Rules of Court
seeking to annul and set aside the aforementioned October 24, 2008 and January 30, 2009 RTC Orders.

Ruling of the Court of Appeals

In its November 2, 2010 Decision,17 the CA observed that the Petition for Certiorari before it was actually an
offshoot of the 2008 RPT Reassessment. And since in resolving the issue of whether the RTC committed
grave abuse of discretion in denying petitioner’s application for a writ of preliminary injunction, the issue of
the validity of the assessment and the collection of the RPT against petitioner must also be resolved, thus
jurisdiction over the case lies within the Court of Tax Appeals (CTA).Hence, the CA ruled:

WHEREFORE, premises considered, the Petition for Certiorari is hereby DENIED DUE COURSE and
accordingly, DISMISSED for lack of jurisdiction.

SO ORDERED.18

Petitioner sought reconsideration; however, it was denied in a Resolution19 dated March 24, 2011.

Undaunted, petitioner filed this Petition imputing upon the CA grave error in:
x x x ruling that it is the Court of Tax Appeals (and not the Court of Appeals) which has jurisdiction over the
CA Injunction Case.20

Petitioner’s Arguments

In its Petition21 and Reply,22 petitioner argues that it is the CA, not the CTA, which has jurisdiction over the
subject matter of its Petition for Certiorari. Petitioner maintains that its petition relates to an ordinary civil
action for injunction and not to a local tax case. It insists that in both the RTC injunction case and the
Petition for Certiorari before the CA, petitioner was not protesting respondents’ assessment of RPT against
it; what it was seeking was respondents’ enjoinment from committing or continuing to commit acts that would
probably violate its right. In particular, petitioner points out that the RTC injunction case was intended to
enjoin respondents from collecting payment during the pendency of the case with the LBAA challenging the
validity of the 2008 RPT Reassessment. Petitioner explains that the said injunction case was filed with the
RTC because the LBAA has no injunctive power.

Respondents’ Arguments

In their Comment,23 respondents argue that in resolving the issue on the propriety of issuing a writ of
injunction, the CA will have to inevitably pass upon the propriety of the assessment of RPT on the Casecnan
Project, a local tax matter which is within the jurisdiction of the CTA. Respondents also echo the CA
pronouncement that petitioner failed to exhaust administrative remedies with respect to the assessment and
collection of RPT.

Our Ruling

There is no merit in the Petition.

It is the CTA which has the power to rule

on a Petition for Certiorari assailing an
interlocutory order of the RTC relating
to a local tax case.

Jurisdiction over the subject matter is required for a court to act on any controversy. It is conferred by law
and not by the consent or waiver upon a court. As such, if a court lacks jurisdiction over an action, it cannot
decide the case on the merits and must dismiss it.24

With respect to the CTA, its jurisdiction was expanded and its rank elevated to that of a collegiate court with
special jurisdiction by virtue of Republic Act No. 9282.25 This expanded jurisdiction of the CTA includes its
exclusive appellate jurisdiction to review by appeal the decisions, orders or resolutions of the RTC in local
tax cases originally decided or resolved by the RTC in the exercise of its original or appellate jurisdiction.26

In the recent case of City of Manila v. Grecia-Cuerdo,27 the Court ruled that the CTA likewise has the
jurisdiction to issue writs of certiorari or to determine whether there has been grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the RTC in issuing an interlocutory order in cases
falling within the CTA’s exclusive appellate jurisdiction, thus:

The foregoing notwithstanding, while there is no express grant of such power, with respect to the CTA,
Section 1, Article VIII of the 1987 Constitution provides, nonetheless, that judicial power shall be vested in
one Supreme Court and in such lower courts as may be established by law and that judicial power includes
the duty of the courts of justice to settle actual controversies involving rights which are legally demandable
and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.

On the strength of the above constitutional provisions, it can be fairly interpreted that the power of the CTA
includes that of determining whether or not there has been grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of the RTC in issuing an interlocutory order in cases falling within the
exclusive appellate jurisdiction of the tax court. It, thus, follows that the CTA, by constitutional mandate, is
vested with jurisdiction to issue writs of certiorari in these cases.28 (Citations omitted and emphasis supplied)

Further, the Court in City of Manila, citing J. M. Tuason & Co., Inc. v. Jaramillo,29 De Jesus v. Court of
Appeals,30 as well as the more recent cases of Galang, Jr. v. Hon. Judge Geronimo31 and Bulilis v.
Nuez,32 held that:

Consistent with the above pronouncement, this Court has held as early as the case of J.M. Tuason & Co.,
Inc. v. Jaramillo, et al. that ‘if a case may be appealed to a particular court or judicial tribunal or body, then
said court or judicial tribunal or body has jurisdiction to issue the extraordinary writ of certiorari, in aid of its
appellate jurisdiction.’ This principle was affirmed in De Jesus v. Court of Appeals, where the Court stated
that ‘a court may issue a writ of certiorari in aid of its appellate jurisdiction if said court has jurisdiction to
review, by appeal or writ of error, the final orders or decisions of the lower court.’ The rulings in J.M. Tuason
and De Jesus were reiterated in the more recent cases of Galang, Jr. v. Geronimo and Bulilis v. Nuez.

Furthermore, Section 6, Rule 135 of the present Rules of Court provides that when by law, jurisdiction is
conferred on a court or judicial officer, all auxiliary writs, processes and other means necessary to carry it
into effect may be employed by such court or officer.33 (Citations omitted)

Anent petitioner’s contention that it is the CA which has jurisdiction over a certiorari petition assailing an
interlocutory order issued by the RTC in a local tax case, the Court had this to say: If this Court were to
sustain petitioners’ contention that jurisdiction over their certiorari petition lies with the CA, this Court would
be confirming the exercise by two judicial bodies, the CA and the CTA, of jurisdiction over basically the
same subject matter – precisely the split-jurisdiction situation which is anathema to the orderly
administration of justice. The Court cannot accept that such was the legislative motive, especially
considering that the law expressly confers on the CTA, the tribunal with the specialized competence over tax
and tariff matters, the role of judicial review over local tax cases without mention of any other court that may
exercise such power. Thus, the Court agrees with the ruling of the CA that since appellate jurisdiction over
private respondents’ complaint for tax refund is vested in the CTA, it follows that a petition for certiorari
seeking nullification of an interlocutory order issued in the said case should, likewise, be filed with the same
court. To rule otherwise would lead to an absurd situation where one court decides an appeal in the main
case while another court rules on an incident in the very same case.

xxxx

A grant of appellate jurisdiction implies that there is included in it the power necessary to exercise it
effectively, to make all orders that will preserve the subject of the action, and to give effect to the final
determination of the appeal. It carries with it the power to protect that jurisdiction and to make the decisions
of the court thereunder effective. The court, in aid of its appellate jurisdiction, has authority to control all
auxiliary and incidental matters necessary to the efficient and proper exercise of that jurisdiction. For this
purpose, it may, when necessary, prohibit or restrain the performance of any act which might interfere with
the proper exercise of its rightful jurisdiction in cases pending before it.34 (Citations omitted and emphasis
supplied) Given these, it is settled that it is the CTA which has exclusive jurisdiction over a special civil
action for certiorari assailing an interlocutory order issued by the RTC in a local tax case.

The RTC injunction case is a local tax >case.

In maintaining that it is the CA that has jurisdiction over petitioner’s certiorari petition, the latter argues that
the injunction case it filed with the RTC is not a local tax case but an ordinary civil action. It insists that it is
not protesting the assessment of RPT against it but only prays that respondents be enjoined from collecting
the same.

The Court finds, however, that in praying to restrain the collection of RPT, petitioner also implicitly questions
the propriety of the assessment of such RPT. This is because in ruling as to whether to restrain the
1awp++i 1

collection, the RTC must first necessarily rule on the propriety of the assessment. In other words, in filing an
action for injunction to restrain collection, petitioner was in effect also challenging the validity of the RPT
assessment. As aptly discussed by the CA:

x x x [T]he original action filed with the RTC is one for Injunction, with an application for Temporary
Restraining Order and a Writ of Preliminary Injunction to enjoin the province of Nueva Ecija from further
collecting the alleged real property tax liability assessed against it. Simply because the action is an
application for injunctive relief does not necessarily mean that it may no longer be considered as a local tax
case. The subject matter and the issues, not the name or designation of the remedy, should control. While
an ancillary action for injunction may not be a main case, the court [still has] to determine, even in a
preliminary matter, the applicable tax laws, rules and jurisprudence. x x x35

Moreover, in National Power Corporation v. Municipal Government of Navotas,36 as well as in City of Lapu-
Lapu v. Philippine Economic Zone Authority,37 this Court already held that local tax cases include RPT.

No doubt, the injunction case before the RTC is a local tax case. And as earlier discussed, a certiorari
petition questioning an interlocutory order issued in a local tax case falls under the jurisdiction of the CT A.
Thus, the CA correctly dismissed the Petition for Certiorari before it for lack of jurisdiction.

WHEREFORE, the Petition is DENIED. The November 2, 2010 Decision and March 24, 2011 Resolution of
the Court of Appeals in CA-G.R. SP No.108441 are AFFIRMED.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

ARTURO D. BRION JOSE CATRAL MENDOZA

Associate Justice Associate Justice

BIENVENIDO L. REYES*
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court's Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify
that the conclusions in the above Decision had been reached in consultation before the case was assigned
to the writer of the opinion of the Court's Division.

MARIA LOURDES P.A. SERENO

Chief Justice

Footnotes

*
Per Special Order No. 2056-A dated June 10, 2015.

1
Rollo, pp. 64-97.

2
CA rollo, Vol. II, pp. 1304-1320; penned by Associate Justice Juan Q. Enriquez, Jr. and concurred
in by Associate Justices Noel G. Tijam and Ramon M. Bato, Jr.; Associate Justices Fiorito S.
Macalino and Samuel H. Gaerlan, dissented.

3
Id. at 1467-1468.

4
Id. at 1347-1376.

5
Id., Vol. I. at 102-175.

6
Id. at 176-194.

7
Id. at 452.

8
Id. at 471.

9
Rollo, pp. 155-203.

10
Raffled to Branch 39 and docketed as Civil Case No. (08)-189-P.

11
Rollo, pp. 204-206.

12
Id. at 207-267.

13
Id. at 268-276.

14
Id. at 277-282; penned by Judge Cynthia Martinez Florendo.

15
Id. at 321-322.

16
CA rollo, Vol. I, pp. 2-93.
17
Id., Vol. II at 1304-1320.

18
Id. at 1319.

19
Id. at 1467-1468.

20
Rollo, p. 70.

21
Id. at 64-97.

22
Id. at 795-805.

23
Id. at 769-774.

Nippon Express (Philippines) Corporation v. Commissioner of Internal Revenue, G.R. No. 185666,
24

February 4, 2015.

An Act Expanding the Jurisdiction of the Court of Tax Appeals (CTA), Elevating Its Rank to the
25

Level of a Collegiate Court with Special Jurisdiction and 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 Tax Appeals, and for Other Purposes.

26
REPUBLIC ACT NO. 9282, Sec. 7(3).

27
G.R. No. 175723, February 4, 2014, 715 SCRA 182.

28
Id. at 202.

29
118 Phil. 1022 (1963).

30
G.R. No. 101630, August 24, 1992, 212 SCRA 823.

31
659 Phil. 65 (2011).

32
670 Phil. 665 (2011).

33
City of Manila v. Grecia-Cuerdo, supra note 27 at 202-203.

34
Id. at 203-205.

35
CA rollo, Vol. II, p. 1315.

36
G.R. No. 192300, November24, 2014.

37
G.R. Nos. 184203 and 187583, November 26, 2014.