G.R. No. 192300. November 24, 2014.

* _______________
 
*  THIRD DIVISION.
NATIONAL POWER CORPORATION,
petitioner, vs. MUNICIPAL GOVERNMENT OF NAVOTAS, 506
SANGGUNIANG BAYAN OF NAVOTAS and MANUEL T. 506 SUPREME COURT
ENRIQUEZ, in his capacity as Municipal Treasurer of REPORTS
Navotas, respondents. ANNOTATED
Remedial Law; Civil Procedure; Courts; Court of Tax Appeals; National Power Corporation
Jurisdiction; Local Taxation; The Court of Tax Appeals (CTA), vs. Municipal Government of
sitting as Division, has jurisdiction to review by appeal the decisions, Navotas
rulings and resolutions of the Regional Trial Court (RTC) over local ground that the controversy did not involve questions of fact
tax cases, which includes real property taxes.—Indeed, the CTA, but only of law.
sitting as Division, has jurisdiction to review by appeal the decisions, Remedial Law; Civil Procedure; Jurisdiction; The well-estab-
rulings and resolutions of the RTC over local tax cases, which lished rule is that the allegations in the complaint and the character
includes real property taxes. This is evident from a perusal of the of the relief sought determine the nature of an action.—The well-
Local Government Code (LGC) which includes the matter of Real established rule is that the allegations in the complaint and the
Property Taxation under one of its main chapters. Indubitably, the character of the relief sought determine the nature of an action. Here,
power to impose real property tax is in line with the power vested in it is not disputed that the machineries and equipment are being used
the local governments to create their own revenue sources, within the for power generation. The primordial issue, however, is whether
limitations set forth by law. As such, the collection of real property these machineries and equipment are actually, directly and
taxes is conferred with the local treasurer rather than the Bureau of exclusively used by petitioner within the purview of Section 234 of
Internal Revenue. the LGC, which exempts it from payment of real property taxes.
Judicial Review; In the event that the taxpayer questions the Same; Same; Courts; Court of Tax Appeals; Appeals; If a
authority and power of the assessor to impose the assessment, and of taxpayer is not satisfied with the decision of the Central Board of
the treasurer to collect the real property tax, resort to judicial action Assessment Appeals (CBAA) or the Regional Trial Court (RTC), as
may prosper.—In the event that the taxpayer questions the authority the case may be, the taxpayer may file, within thirty (30) days from
and power of the assessor to impose the assessment, and of the receipt of the assailed decision, a petition for review with the Court
treasurer to collect the real property tax, resort to judicial action may of Tax Appeals (CTA) pursuant to Section 7(a) of Republic Act (RA)
prosper. This is in consonance with the ruling in Ty v. Trampe, 250 No. 9282.—In fine, if a taxpayer is not satisfied with the decision of
SCRA 500 (1995). Here, a petition for prohibition with prayer for a the CBAA or the RTC, as the case may be, the taxpayer may file,
restraining order and/or writ of preliminary injunction was filed to within thirty (30) days from receipt of the assailed decision, a
declare null and void the new tax assessments and enjoin the petition for review with the CTA pursuant to Section 7(a) of R.A.
collection of real estate taxes based on said assessments. Despite the 9282. In cases where the question involves the amount of the tax or
alleged non-exhaustion of administrative remedies and nonpayment the correctness thereof, the appeal will be pursuant to Section 7(a)(5)
of the real property tax, the Court gave due course to the case on the of R.A. 9282. When the appeal comes from a judicial remedy which

1|Page
questions the authority of the local government to impose the tax, Respondent Sangguniang Bayan of Navotas is a legislative body
Section 7(a)(3) of R.A. 9282 applies. Thereafter, such decision, being sued for the purpose of enjoining it from performing any and
ruling or resolution may be further reviewed by the CTA En all acts geared toward [the] collection of the assailed taxes and/or
Banc pursuant to Section 2, Rule 4 of the Revised Rules of the CTA. sale of petitioner’s properties during the pendency of the instant
petition. It may be served with summons and other court processes
PETITION for review on certiorari of the decision and through the Vice Mayor, as the presiding officer, at the Municipal
resolution of the Court of Tax Appeals En Banc. Hall Building, Navotas, Metro Manila.
The facts are stated in the opinion of the Court. Respondent Manuel T. Enriquez is being sued in his official
  Office of the Solicitor General for petitioner. capacity as the Municipal Treasurer of Navo-
  Emmanuel M. Pantoja for respondents. _______________
507
1  Penned by Presiding Justice Ernesto D. Acosta, with Associate Justices
VOL. 741, 507 Juanito C. Castañeda, Jr., Lovell R. Bautista, Erlinda P. Uy, Caesar A.
NOVEMBER 24, 2014 Casanova, Esperanza R. Fabon-Victorino, Cielito N. Mindaro-Grulla, and
Amelia R. Cotangco-Manalastas, concurring; Olga Palanca-Enriquez,
National Power Corporation dissenting; Rollo, pp. 50-75.
vs. Municipal Government of 2  Id., at pp. 76-79.
Navotas
508
PERALTA, J.:
 
508 SUPREME COURT
Before us is a Petition for Review on Certiorari under Rule REPORTS
45 of the Rules of Court seeking to reverse and set aside the ANNOTATED
Decision1 dated March 1, 2010 and Resolution2 dated May 6, National Power Corporation
2010 of the Court of Tax Appeals (CTA) En Banc in E.B. No. vs. Municipal Government of
461. Navotas
The facts, as found by the CTA En Banc, are as follows: tas and may be served with summons and other court processes at the
Petitioner National Power Corporation (NPC) is a government- Municipal Hall Building, Navotas, Metro Manila.
owned and -controlled corporation organized and existing under and On the respective dates of November 16, 1988 and June 29, 1992,
by virtue of Republic Act (RA) No. 6395, as amended, with principal petitioner entered into a Build-Operate-and-Transfer Project
office address at NPC Office Building Complex, corner Quezon Agreements (BOTs) with Mirant Navotas I Corporation (MNC-I),
Avenue and BIR Road, East Triangle, Diliman, Quezon City. formerly known as Hopewell Energy Philippines Corporation, and
Respondent Municipal Government of Navotas, is a local Mirant Navotas II Corporation (MNC-II), formerly known as
government unit, hosting petitioner’s Navotas Power Stations I and II Hopewell Tileman (Philippines) Corporation. The BOTs are for the
located in the Municipality of Navotas. It may be served with construction, operation and eventual transfer to petitioner of MNC-
summons and court processes through the Municipal Mayor, at the I’s 200-MW and MNC-II’s 100-MW gas turbine power stations.
Municipal Hall Building, Navotas, Metro Manila. During the period of the agreement, the operation of the power

2|Page
stations shall be under the actual and direct control and supervision  
of petitioner. Consequently, petitioner has the obligation to pay for In a letter dated July 26, 2005, petitioner reiterated to the
all taxes, except business taxes, relative to the implementation of the Municipal Assessor of Navotas their position that the subject
agreements. properties are exempt from real property tax.
For the 1 quarter of 2003, petitioner paid respondent
st 
On November 21, 2005, a Warrant of Levy was received from
Municipality, real property taxes in the amounts of P3,382,715.88 respondent Municipal Treasurer. MNC-II also received two Notices
and P4,973,869.83 for the MNC-I and MNC-II power stations, of Sale of Delinquent Real Property, scheduling the public auction of
respectively. After the said quarter, petitioner stopped paying the real the subject properties on December 21, 2005.
property taxes, claiming exemption from payment thereon pursuant On December 16, 2005, petitioner filed before the Regional Trial
to Section 234(c) of the Local Government Code (LGC) of 1991. Court (RTC) of Malabon City, a Petition for Declaratory Relief,
In a letter dated March 30, 2004, petitioner informed the Annulment of Notice of Delinquency, Warrant of Levy, and Notice of
Municipal Assessor of Navotas (Municipal Assessor) of their Sale with prayer for the issuance of a Writ of Preliminary Injunction
position on the exemption from real property tax of the subject and Temporary Restraining Order (TRO).
properties, pertaining to machineries and equipment which are in the Petitioner’s application for the issuance of a TRO was denied by
name of Hopewell Tileman (Phils.) Corporation. the RTC. Respondents proceeded with the scheduled public auction.
Pursuant to the BOTs, MNC-I and MNC-II eventually transferred Considering that there were no bidders for the purchase of the
to petitioner all their rights, title and interests in and to the fixtures, subject properties, the same were forfeited in favor of respondent
fittings, plant and equipment, and improvements comprising the Municipality.
power stations on March 24, 2003 and August 1, 2005, respectively. Petitioner filed an amended petition before the RTC seeking to
On May 25, 2005, MNC-II received four notices from respondent declare as null and void the public auction and the forfeiture of the
Municipal Treasurer informing MNC-I subject properties in favor of respondent Municipality on the ground
that these actions are patently illegal because the subject properties
509 are exempt from real property tax.
VOL. 741, 509 The RTC denied the petition on May 23, 2007. It ruled that
NOVEMBER 24, 2014 although Section 234 of the LGC exempts petitioner from payment
National Power Corporation of real property tax due on the sub-
vs. Municipal Government of 510
Navotas 510 SUPREME COURT
and MNC-II of their real property tax delinquencies for the 2 , 3 ,
nd rd
REPORTS
and 4 quarters of calendar year 2003 and for the calendar years 2004
th 

and 2005. Details are as follows: ANNOTATED

National Power Corporation
vs. Municipal Government of
Navotas

3|Page
ject properties located at MNC-I and MNC-II, failure of petitioner to NOVEMBER 24, 2014
exhaust administrative remedies resulted in the finality of the National Power Corporation
assessment; thus, the eventual collection was in order. The RTC
explained that petitioner should have appealed the assessments to the vs. Municipal Government of
Local Board of Assessment Appeals (LBAA), pursuant to Section Navotas
226 of the LGC, within 60 days from the date of receipt of the In a Resolution dated March 6, 2008, the case was considered
written notice of assessment. If not satisfied with the decision of the submitted for Decision after petitioner manifested to adopt its
LBAA, petitioner should appeal to the Central Board of Assessment Petition for Review as its Memorandum and after respondents failed
Appeals (CBAA), pursuant to Section 229 of the same code. The to file their Memorandum.
RTC further went on in saying that before initiating any protest to the In a Decision promulgated on July 18, 2008, the Second Division
assessment, the tax due must first be paid. dismissed the Petition and sustained the RTC’s Decision dated May
After an extension of 30 days was granted, a Petition for Review 23, 2007. Petitioner’s Motion for Reconsideration filed on August 6,
with application for Temporary Restraining Order and/or Order of 2008 was likewise denied in a Resolution dated January 9, 2009.3

Suspension of Collection and Writ of Preliminary Injunction was

seasonably filed with this Court though registered mail on July 27,  
2007 and received on August 2, 2007. The Petition was raffled to the Resultantly, petitioner filed a petition before the CTA En
Second Division of this Court. Banc.
Respondents filed their Comment/Opposition through registered In a Decision dated March 1, 2010, the CTA En
mail on October 15, 2007 and which was received by this Court on Banc affirmed the CTA Second Division’s decision and held as
October 30, 2007. follows:
In a Resolution dated December 17, 2007, the Second Division WHEREFORE, finding no reversible error in the assailed
treated petitioner’s application for TRO and/or Order of Suspension Decision promulgated on July 18, 2008 and the Resolution dated
of Collection and Writ of Preliminary Injunction as a “Motion to January 9, 2009, the instant Petition for Review is
Suspend the Collection of Taxes,” considering that the ownership of hereby DISMISSED for lack of merit.
the auctioned properties was not yet consolidated in the name of SO ORDERED. 4

respondents; thus, the collection of payment of the alleged deficiency

taxes was not yet consummated. The application was granted on  
equitable considerations, to preserve the status quo during the Unfazed, petitioner filed a Motion for Reconsideration but
pendency of the appeal, and in order not to render ineffectual and the same was denied in a Resolution dated May 6, 2010.
nugatory the judgment that will be rendered. Respondents were Accordingly, petitioner lodged the present petition praying
enjoined from consolidating the ownership of the subject properties, as follows:
from confiscating them, from taking possession thereof and from WHEREFORE, it is respectfully prayed that the Decision dated
doing any and all acts relative thereto during the pendency of March 1, 2010 and Resolution dated May 6, 2010 of the Court of
petitioner’s appeal, until further ordered. Tax Appeals En Banc be REVERSED and SET ASIDE; a new one
511 be rendered declaring:
VOL. 741, 511
4|Page
_______________ In essence, the issue is whether or not the CTA Second
Division has jurisdiction to review the decision of the RTC
3  Id., at pp. 51-56.
4  Id., at p. 74. (Emphasis in the original) which concerns a petition for declaratory relief involving real
property taxes.
512 We rule in the affirmative.
512 SUPREME COURT _______________
REPORTS
5  Id., at pp. 43-44.
ANNOTATED 6  Id., at p. 23.
National Power Corporation
513
vs. Municipal Government of
VOL. 741, 513
Navotas
1) that the Court of Tax Appeals has jurisdiction over the subject NOVEMBER 24, 2014
matter of the case; National Power Corporation
2) petitioner as exempt from paying real property taxes over the vs. Municipal Government of
properties subject of the present case; and Navotas
3) the assailed Notices of Delinquency, Warrant of Levy and First, Section 7 of Republic Act (R.A.) No. 92827 explicitly
Notice of Sale and the Auction Sale and Forfeiture as null and void.
enumerates the scope of the CTA’s jurisdiction over decisions,
Petitioner prays for such other reliefs just and equitable under the
premises. 5
orders or resolutions of the RTC in local tax cases, to wit:
Sec. 7. Jurisdiction.—The CTA shall exercise:
  (a) Exclusive appellate jurisdiction to review by appeal, as herein
Thus, petitioner assigns the following errors for this Court’s provided:
1. Decisions of the Commissioner of Internal Revenue in cases
resolution:
involving disputed assessments, refunds of internal revenue taxes,
THE COURT OF TAX APPEALS EN BANC ERRED IN
fees or other charges, penalties in relation thereto, or other matters
SUSTAINING THE DECISION OF THE COURT OF TAX
arising under the National Internal Revenue Code or other laws
APPEALS SECOND DIVISION WHICH HELD THAT:
administered by the Bureau of Internal Revenue;
1) IT HAS NO JURISDICTION OVER THE INSTANT
2. Inaction by the Commissioner of Internal Revenue in cases
PETITION.
involving disputed assessments, refunds of internal revenue taxes,
2) APPEALS TO THE LBAA AND CBAA ARE REQUIRED
fees or other charges, penalties in relation thereto, or other matters
BEFORE THE PETITION DATED DECEMBER 12, 2005 (AS
arising under the National Internal Revenue Code or other laws
AMENDED ON JANUARY 5, 2006) FOR DECLARATORY
administered by the Bureau of Internal Revenue, where the National
RELIEF FILED BY PETITIONER BEFORE THE REGIONAL
Internal Revenue Code provides a specific period of action, in which
TRIAL COURT MAY BE GIVEN DUE COURSE. 6

case the inaction shall be deemed a denial;

 

5|Page
 3. Decisions, orders or resolutions of the Regional Trial Courts 302, respectively, of the Tariff and Customs Code, and safeguard
in local tax cases originally decided or resolved by them in the measures under Republic Act No. 8800, where either party may
exercise of their original or appellate jurisdiction; appeal the decision to impose or not to impose said duties;
4. Decisions of the Commissioner of Customs in cases involving x x x 8

liability for customs duties,

 
7  An Act Expanding the Jurisdiction of the Court of Tax Appeals Such authority is echoed in Section 3, Rule 4 of the Revised
(CTA), Elevating its Rank to the Level of a Collegiate Court with Rules of the CTA, which enumerates the jurisdiction of the
Special Jurisdiction and Enlarging its Membership, Amending for CTA, sitting as a Division, to wit:
the Purpose Certain Sections of Republic Act No. 1125, as Section 3. Cases Within the Jurisdiction of the Court in
Amended, Otherwise Known as the Law Creating the Court of Tax Division.—The Court Division shall exercise:
Appeals, and for Other Purposes.
_______________
514
514 SUPREME COURT 8  Emphasis supplied.
REPORTS
515
ANNOTATED VOL. 741, 515
National Power Corporation NOVEMBER 24, 2014
vs. Municipal Government of National Power Corporation
Navotas vs. Municipal Government of
fees, or other monetary charges, seizure, detention or release of
property affected, fines, forfeitures or other penalties in relation Navotas
thereto, or other matters arising under the Customs Laws or other (a) Exclusive original or appellate jurisdiction to review by
laws administered by the Bureau of Customs; appeal the following:
5. Decisions of the Central Board of Assessment Appeals in the x x x x
exercise of its appellate jurisdiction over cases involving the (3) Decisions, resolutions or orders of the Regional Trial
assessment and taxation of real property originally decided by the Courts in local tax cases decided or resolved by them in the
provincial or city board assessment appeals; exercise of their original jurisdiction;
6. Decisions of the Secretary of Finance on customs cases x x x 9

elevated to him automatically for review from decisions of the

 
Commissioner of Customs which are adverse to the Government
under Section 2315 of the Tariff and Customs Code; Indeed, the CTA, sitting as Division, has jurisdiction to
7. Decisions of the Secretary of Trade and Industry, in the case of review by appeal the decisions, rulings and resolutions of the
nonagricultural product, commodity or article, and the Secretary of RTC over local tax cases, which includes real property taxes.
Agriculture in the case of agricultural product, commodity or article, This is evident from a perusal of the Local Government Code
involving dumping and countervailing duties under Sections 301 and (LGC) which includes the matter of Real Property Taxation

6|Page
under one of its main chapters. Indubitably, the power to restricted sense was to be used.11 In the words of the Court
impose real property tax is in line with the power vested in the in Marcos v. Chief of Staff:12
local governments to create their own revenue sources, within Where words are used which have both, a restricted and a general
the limitations set forth by law. As such, the collection of real meaning, the general must prevail over the restricted unless the
property taxes is conferred with the local treasurer rather than nature of the subject matter of the context clearly indicates that the
the Bureau of Internal Revenue. limited sense is intended. 13

We, therefore, disagree with the conclusion of the CTA En  

Banc that real property taxes have always been treated by our Here, the context in which the word “local taxes” is
laws separately from local taxes. The fact that a separate employed does not clearly indicate that the limited or restricted
chapter is devoted to the treatment of real property taxes, and a view was intended by the legislature. In addition, the
distinct appeal procedure is provided therefor does not justify specification of real property tax assessment under paragraph
an inference that Section 7(a)(3) of R.A. 9282 pertains only to (a)(5) of Section 7 of R.A. 9282, in relation to the decisions of
local taxes other than real property taxes. Rather, the term the CBAA, is only proper given that the CBAA has no
“local taxes” in the aforementioned provision should be jurisdiction, either original or appellate, over cases involving
considered in its general and comprehensive sense, which local taxes other than real property taxes.
embraces real property tax assessments, in line with the Based on the foregoing, the general meaning of “local
precept Generalia verba sunt generaliter inteligencia — what taxes” should be adopted in relation to paragraph (a)(3) of
is generally spoken shall be generally understood.10 Between Section 7 of R.A. 9282, which necessarily includes real
_______________
property taxes.
9   Id. Second, as correctly pointed out by petitioner, when the
10  Gutierrez v. House of Representatives Committee on Justice, G.R. No. legality or validity of the assessment is in question, and not its
193459, February 15, 2011, 643 SCRA 198, 244. reasonableness or correctness, appeals to the LBAA, and
516 subsequently to the CBAA, pursuant to Sections 22614 and
516 SUPREME COURT 22915 of the LGC, are not necessary.
_______________
REPORTS
ANNOTATED 11  Id.
National Power Corporation 12  89 Phil. 246 (1951).
13  Id., at p. 248.
vs. Municipal Government of 14  Section 226. Local Board of Assessment Appeals.—Any owner or
Navotas person having legal interest in the property who is not satisfied with the action
of the provincial, city or municipal assessor in the assessment of his property
the restricted sense and the general meaning of a word, the may, within sixty (60) days from the date of receipt of the written notice of
general must prevail unless it was clearly intended that the assessment, appeal to the

7|Page
 517 in the revision or the assessment, it shall be his duty to notify the owner of the
VOL. 741, 517 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 person having legal
NOVEMBER 24, 2014 interest therein or the assessor who is not satisfied with the decision of the
National Power Corporation 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
vs. Municipal Government of decision of the Central Board shall be final and executory.
Navotas 16  321 Phil. 81; 250 SCRA 500 (1995).

518
Stated differently, in the event that the taxpayer questions
the authority and power of the assessor to impose the 518 SUPREME COURT
assessment, and of the treasurer to collect the real property tax, REPORTS
resort to judicial action may prosper. This is in consonance ANNOTATED
with the ruling in Ty v. Trampe.16 Here, a petition for National Power Corporation
prohibition with prayer for a restraining order and/or writ of vs. Municipal Government of
preliminary injunction was filed to declare null and void the Navotas
new tax assessments and enjoin the collection of real estate of administrative remedies and nonpayment of the real property
taxes based on said assessments. Despite the alleged non- tax, the Court gave due course to the case on the ground that
exhaustion the controversy did not involve questions of fact but only of
_______________ law. Thus:
Respondents argue that this case is premature because petitioners
Board of Assessment Appeals of the provincial or city by filing a petition
under oath in the form prescribed for the purpose, together with copies of the neither appealed the questioned assessments on their properties to the
tax declarations and such affidavits or documents submitted in support of the Board of Assessment Appeal, pursuant to Sec. 226, nor paid the
appeal. taxes under protest, per Sec. 252.
15  Section 229. Action by the Local Board of Assessment Appeals.— We do not agree. Although as a rule, administrative remedies
(a)  The Board shall decide the appeal within one hundred twenty (120) must first be exhausted before resort to judicial action can prosper,
days from the date of receipt of such appeal. The Board, after hearing, shall there is a well-settled exception in cases where the controversy does
render its decision based on substantial evidence or such relevant evidence on
record as a reasonable mind might accept as adequate to support the conclusion. not involve questions of fact but only of law. In the present case, the
(b)  In the exercise of its appellate jurisdiction, the Board shall have the parties, even during the proceedings in the lower court on 11 April
power to summon witnesses, administer oaths, conduct ocular inspection, take 1994, already agreed “that the issues in the petition are legal,” and
depositions, and issue subpoena and subpoena duces tecum. The proceedings of thus, no evidence was presented in said court.
the Board shall be conducted solely for the purpose of ascertaining the facts In laying down the powers of the Local Board of Assessment
without necessarily adhering to technical rules applicable in judicial Appeals, R.A. 7160 provides in Sec. 229(b) that “(t)he proceedings
proceedings.
(c)  The secretary of the Board shall furnish the owner of the property or
of the Board shall be conducted solely for the purpose of ascertaining
the person having legal interest therein and the provincial or city assessor with a the facts . . . .” It follows that appeals to this Board may be fruitful
copy of the decision of the Board. In case the provincial or city assessor concurs only where questions of fact are involved. Again, the protest

8|Page
contemplated under Sec. 252 of R.A. 7160 is needed where there is generation. The primordial issue, however, is whether these
a question as to the reasonableness of the amount assessed. Hence, machineries and equipment are actually, directly and
if a taxpayer disputes the reasonableness of an increase in a real exclusively used by petitioner within the purview of Section
estate tax assessment, he is required to “first pay the tax” under 23419 of the LGC, which exempts it from payment of real
protest. Otherwise, the city or municipal treasurer will not act on his property taxes, to wit:
protest. In the case at bench, however, the petitioners are
Section 234. Exemptions from Real Property Tax.—The
questioning the very authority and power of the assessor, acting
following are exempted from payment of the real property tax:
solely and independently, to impose the assessment and of the
(a) Real property owned by the Republic of the Philippines or any
treasurer to collect the tax. These are not questions
of its political subdivisions except when the beneficial use thereof
519 has been granted, for consideration or otherwise, to a taxable person;
VOL. 741, 519 _______________
NOVEMBER 24, 2014
National Power Corporation 17  Id., at pp. 101-102; pp. 518-519. (Emphasis supplied)
18  Olivares v. Marquez, 482 Phil. 183, 191; 438 SCRA 679, 685-686
vs. Municipal Government of (2004).
Navotas 19  Emphasis supplied.
merely of amounts of the increase in the tax but attacks on the
520
very validity of any increase.
17

520 SUPREME COURT

  REPORTS
Accordingly, if the only issue is the legality or validity of ANNOTATED
the assessment — a question of law — direct recourse to the National Power Corporation
RTC is warranted. vs. Municipal Government of
In the case at bar, the claim of petitioner essentially Navotas
questions the very authority and power of the Municipal (b) Charitable institutions, churches, parsonages or convents
Assessor to impose the assessment and of the Municipal appurtenant thereto, mosques, nonprofit or religious cemeteries and
Treasurer to collect the real property tax with respect to the all lands, buildings, and improvements actually, directly, and
machineries and equipment located in the Navotas I and II exclusively used for religious, charitable or educational purposes;
power plants. Certainly, it does not pertain to the correctness of (c) All machineries and equipment that are actually, directly
the amounts assessed but attacks the validity of the assessment and exclusively used by local water districts and government owned
of the taxes itself. or controlled corporations engaged in the supply and distribution
The well-established rule is that the allegations in the of water and/or generation and transmission of electric power;
complaint and the character of the relief sought determine the (d) All real property owned by duly registered cooperatives as
provided for under R.A. No. 6938; and
nature of an action.18 Here, it is not disputed that the
machineries and equipment are being used for power
9|Page
 (e) Machinery and equipment used for pollution control and The foregoing was not disputed by respondents.
environmental protection. Despite this, the RTC still dismissed the petition on the
Except as provided herein, any exemption from payment of real ground of lack of jurisdiction for failure of petitioner to appeal
property tax previously granted to, or presently enjoyed by, all the assailed assessment to the LBAA and the CBAA.
persons, whether natural or juridical, including all government- More, we find it obscure that the CTA En Banc, while
owned or -controlled corporations are hereby withdrawn upon the
finding that the issue obtaining in the present case pertains to a
effectivity of this Code.
question of fact, held that Ty is applicable to the present case
  with respect to the requirement for payment under protest, to
As can be gleaned from the foregoing, the issue is clearly wit:
legal given that it involves an interpretation of the contract If the legality of the real property tax assessment is at issue, the
between the parties vis-à-vis the applicable laws, i.e., which well pronounced ruling and ratiocination made by the Supreme Court
entity actually, directly and exclusively uses the subject in the case of Ty v. Trampe is applicable. There, the Supreme Court
notes:
machineries and equipment. The answer to such question
Again, the protest contemplated under Sec. 252 of R.A. 7160 is
would then determine whether petitioner is indeed exempt from needed where there is a question as to the reasonableness of the
payment of real property taxes. Since the issue is a question of amount assessed. Hence, if a taxpayer disputes the reasonableness of
law, the jurisdiction was correctly lodged with the RTC. an increase in a real estate tax assessment, he is required to “first pay
On this score, it is worthy to note that in its Decision dated the tax” under protest. Otherwise, the city or municipal treasurer will
March 23, 2007, the RTC already declared that petitioner is not act on his protest. In the case at bench however, the petitioners
exempt from payment of real property taxes on its machiner- are questioning the very authority and power of the assessor, acting
  solely and independently, to impose the assessment and of the
521 treasurer to collect the tax. These are not questions merely of
VOL. 741, 521 amounts of the in-
NOVEMBER 24, 2014 _______________
National Power Corporation
vs. Municipal Government of 20  Records, p. 41.

Navotas 522
ies located at MNC-I & MNC-II, the pertinent portion of which 522 SUPREME COURT
reads: REPORTS
There is no dispute that Section 234 of the Local Government ANNOTATED
Code exempts petitioner from payment of real property tax due on its
machineries located at MNC-1 and MNC-2 power stations. 20 National Power Corporation
vs. Municipal Government of
  Navotas

10 | P a g e
crease in the tax but attacks on the very validity of any increase. VOL. 741, 523
In a similar way, as there has been an apparent admission by NOVEMBER 24, 2014
petitioner that it is not questioning the excessiveness or
reasonableness of the real property tax assessment, but the legality National Power Corporation
thereof; there is no need for petitioner to pay the real property tax vs. Municipal Government of
assessment before initiating a protest. Navotas
At this point, although we agree with petitioner on it stance that protest no longer necessary given the availing circumstances of
payment under protest is not necessary, we still maintain the view the case. If indeed the Court a quo finds the present case to fall
that exhausting the available remedies of lodging an appeal before under the jurisdiction of the LBAA, and then the CBAA on
the LBAA and CBAA before availing judicial intervention is still appeal, the dispensation with the requirement of payment under
mandatory. 21

protest would be devoid of merit and contrary to law and

  jurisprudence.
We find the reasoning of the CTA En Banc quite illogical. It is for the foregoing reasons that we deem the reversal of
For one, it held that unlike Ty, the resolution of the question of the ruling of the CTA En Banc in order. At the risk of
law submitted by petitioner requires proof of facts;22 hence, repetition, what is being questioned in the present case is the
resort to the LBAA is necessary. However, instead of authority of the Municipal Assessor to impose the assessment
sustaining the requirement of payment under protest under and of the Municipal Treasurer to collect the real property
Section 25223 of the LGC, the CTA En Banc found the payment taxes. Accordingly, resort to the LBAA and the CBAA is no
of longer necessary for the same reason that what is being
_______________ questioned is the legality or validity of the tax assessment, not
the reasonableness or correctness of the assessment. Certainly,
21  Id., at pp. 73-74. (Emphasis ours) it would be unjust to require the realty owner to first pay the
22  Id., at p. 75.
23  Section 252. Payment under Protest.—(a)  No protest shall be
tax, the validity of which he precisely questions, before he can
entertained unless the taxpayer first pays the tax. There shall be annotated on lodge a complaint to the court.
the tax receipts the words “paid under protest.” The protest in writing must be In fine, if a taxpayer is not satisfied with the decision of the
filed within thirty (30) days from payment of the tax to the provincial, city CBAA or the RTC, as the case may be, the taxpayer may file,
treasurer or municipal treasurer, in the case of a municipality within
Metropolitan Manila Area, who shall decide the protest within sixty (60) days within thirty (30) days from receipt of the assailed decision, a
from receipt. petition for review with the CTA pursuant to Section 7(a) of
(b) The tax or a portion thereof paid under protest, shall be held in trust by R.A. 9282. In cases where the question involves the amount of
the treasurer concerned. the tax or the correctness thereof, the appeal will be pursuant to
(c)  In the event that the protest is finally decided in favor of the taxpayer,
the amount or portion of the tax protested shall be refunded to the protestant, or Section 7(a)(5) of R.A. 9282. When the appeal comes from a
applied as tax credit against his existing or future tax liability. judicial remedy which questions the authority of the local
government to impose the tax, Section 7(a)(3) of R.A. 9282
523 applies. Thereafter, such decision, ruling or resolution may be

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further reviewed by the CTA En Banc pursuant to Section 2, remand of this case to the RTC is warranted for the proper
Rule 4 of the Revised Rules of the CTA, to wit: 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 be served.
(d) In the event that the protest is denied or upon the lapse of the sixty-day
period prescribed in subparagraph (a), the taxpayer may avail of the remedies as WHEREFORE, the Court GRANTS the petition
provided for in Chapter 3, Title II, Book II of this Code. and SETS ASIDE the Decision dated March 1, 2010 and
Resolution dated May 6, 2010 of the Court of Tax Appeals En
524
Banc in E.B. No. 461. Moreover, this case is REMANDED to
524 SUPREME COURT the Regional Trial Court for determination of petitioner’s
REPORTS claims for annulment of Notice of Delinquency, Warrant of
ANNOTATED Levy, and Notice of Sale.
National Power Corporation _______________
vs. Municipal Government of 24  Emphasis supplied.
Navotas
Section 2. Cases Within the Jurisdiction of the Court En Banc. 525
—The Court En Banc shall exercise exclusive appellate jurisdiction VOL. 741, 525
to review by appeal the following: NOVEMBER 24, 2014
(a) Decisions or resolutions on motions for reconsideration or
National Power Corporation
new trial of the Court in Divisions in the exercise of its exclusive
appellate jurisdiction over: vs. Municipal Government of
x x x x Navotas
(2) Local tax cases decided by the Regional Trial Courts in SO ORDERED.
the exercise of their original jurisdiction; Velasco, Jr. (Chairperson), Villarama, Jr.,
x x x 24
Mendoza** and Jardeleza, JJ., concur.
  Petition granted, judgment and resolution set aside.
Thus, the CTA En Banc erred in dismissing the petition for
review En Banc, and affirming the CTA Second Division’s Notes.—The Court of Tax Appeals (CTA) has exclusive
position that the RTC has no jurisdiction over the instant case appellate jurisdiction to review on appeal decisions of the
for failure of petitioner to exhaust administrative remedies Commissioner of Internal Revenue (CIR) in cases involving
which resulted in the finality of the assessment. refunds of internal revenue taxes. (Silicon Philippines, Inc. vs.
Anent the matter on the validity of the Notices of Commissioner of Internal Revenue, 717 SCRA 30 [2014])
Delinquency issued by the Municipal Treasurer, as well as the The Court of Tax Appeals (CTA) is a court of special
Warrant of Levy, the same involves questions of fact. Thus, the jurisdiction. As such, it can only take cognizance of such

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matters as are clearly within its jurisdiction. (Commissioner of
Internal Revenue vs. Silicon Philippines, Inc. [formerly Intel
Philippines Manufacturing, Inc.], 718 SCRA 513 [2014])
——o0o——
_______________

* * Designated acting member, in lieu of Associate Justice Bienvenido L.

Reyes, per Special Order No. 1878 dated November 21, 2014.

 
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