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Local Government Taxation
LOCAL GOVERNMENT TAXATIONREMEDIES
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1. LIEN
2. CIVIL REMEDIESa. ADMINISTRATIVE ACTIONS
b. JUDICIAL ACTIONS
GOVERNMENT REMEDIES
Local Taxation - Government Remedies
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Local Taxation - Government Remedies
A lien in its modern-acceptation is understood to denote a
legal claim or charge on property, either real or personal,as security for the payment of some debt or obligation.
(HSBC v Rafferty)
Definition:
Legal Basis:SEC. 173. Local Government's Lien. - Local taxes, fees,
charges and other revenues constitute a lien, superior toall liens, charges or encumbrances in favor of any person,
enforceable by appropriate administrative or judicial
action, not only upon any property or rights therein which
may be subject to the lien but also upon property used in
business, occupation, practice of profession or calling, or
exercise of privilege with respect to which the lien is
imposed. The lien may only be extinguished upon full
payment of the delinquent local taxes fees and charges
including related surcharges and interest
LIEN
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Local Taxation - Government Remedies
Legal Basis:
SEC. 174. Civil Remedies. - The civil remedies for the
collection of local taxes, fees, or charges, and relatedsurcharges and interest resulting from delinquency shall be:
(a) By administrative action thru distraint of goods,
chattels, or effects, and other personal property of
whatever character, including stocks and other
securities, debts, credits, bank accounts, and
interest in and rights to personal property, and by
levy upon real property and interest in or rights
to real property;
Notice of sale to the delinquent land owners and to the
public in general is an essential and indispensable
requirement of law, the non-fulfillment of which invalidates
the sale (SERFINO v CA)
Jurisprudence:
CIVIL REMEDIES
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DISTRAINT
Legal Basis:
Legal Basis:
CIVIL REMEDIES
Local Taxation - Government Remedies
SEC. 175., LGC Distraint of Personal Property
SEC. 176. Levy on Real Property
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Seizure
Accounting
Publication
Sale
Disposition
D
IS
T
R
A
IN
T
Written Notice Certificate of Fact of Deliquency
Signed Account of Goods Submitted to Taxpayer
Public AuctionReport within 5 Days
After SaleIf not disposed within 120 days, sale
exhibited in not less than three (3) public and conspicuous
places in the territory of the local government unit
The proceeds of the sale shall be applied to satisfy the tax
Local Taxation - Government Remedies
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AuthenticatedCertificate
Written Notice of
Levy to Assessor,ROD and Taxpayer
Within 10Days
Report of the
Levying Officer
LEVY
Treasurer, shall within thirty (30) days after
execution of the distraint, proceed with the levy
on the taxpayer's real property
Local Taxation - Government Remedies
After the expiration of the time required to pay the delinquent tax, fee,
or charge, real property may be levied
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Local Taxation - Taxpayer's Remedies
What happens after the Levy
Levy Advertisementshall cover 30 days SaleTreasurer
issues a
Report
Issue
Certificate
If Payment
is made
prior to Sale
In case there
is no bidder
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RedeemedWithin 1 year
Not Redeemed
Sale
Local Taxation - Government Remedies
What happens after the Sale
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SEC. 185. Personal Property Exempt from Distraint or Levy
(a) Tools and the implements necessarily used by the delinquent taxpayer in
his trade or employment;
(b) One (1) horse, cow, carabao, or other beast of burden, such as the
delinquent taxpayer may select, and necessarily used by him in his ordinary
occupation;
(c) His necessary clothing, and that of all his family;
(d) Household furniture and utensils necessary for housekeeping and usedfor that purpose by the delinquent taxpayer, such as he may select, of a value
not exceeding Ten thousand pesos (P=10,000.00);
(e) Provisions, including crops, actually provided for individual or family use
sufficient for four (4) months;
(f) The professional libraries of doctors, engineers, lawyers and judges;
(g) One fishing boat and net, not exceeding the total value of Ten thousandpesos (P=10,000.00), by the lawful use of which a fisherman earns his
livelihood; and
(h) Any material or article forming part of a house or improvement of any real
property.
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JUDICIAL
Real Property TaxationGovernment Remedies
Treasurer to
submit
certified
statement
ofdelinquency
Provincial
Atty file
civil actionMTC/RTC CTA SC
Legal Basis:
SEC. 183. Collection of Delinquent Taxes, Fees, Charges or
other Revenues through Judicial Action. - The local
government unit concerned may enforce the collection ofdelinquent taxes, fees, charges or other revenues by civil
action in any court of competent jurisdiction. The civil action
shall be filed by the local treasurer within the period
prescribed in Section 194 of this Code.
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Local Taxation - Taxpayer's Remedies
PRIOR TO ASSESSMENT:1.APPEAL TO THE SECRETARY OF JUSTICE
AFTER ASSESSMENT:
1. PROTEST ON ASSESSMENT OF LOCAL TAX
2. CLAIM OF REFUND OR TAX CREDIT
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Local Taxation - Taxpayer's Remedies
APPEAL TO SOJ
Section 187, LGC - That any question on the constitutionalityor legality of tax ordinances or revenue measures may be
raised on appeal within thirty (30) days from the effectivity
thereof to the Secretary of Justice who shall render a
decision within sixty (60) days from the date of receipt of the
appeal: Provided, however, That such appeal shall not havethe effect of suspending the effectivity of the ordinance and
the accrual and payment of the tax, fee, or charge levied
therein: Provided, finally, That within thirty (30) days after
receipt of the decision or the lapse of the sixty-day period
without the Secretary of Justice acting upon the appeal, the
aggrieved party may file appropriate proceedings with a
court of competent jurisdiction.
Legal Basis
N
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Local Taxation - Taxpayer's Remedies
Within 30
days from
effectivity
of
Ordinance
SECRETARY OF
JUSTICERTC
APPEAL TO SOJ
SC
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Local Taxation - Taxpayer's Remedies
Within 30
days from
effectivity
of
Ordinance
SECRETARY OF
JUSTICERTC
APPEAL TO SOJ
SC
ROC, RULE 45, Section 2. Time for filing; extension.The petition shall be filed
within fifteen (15) days from notice of the judgment or final order or resolution
appealed from, or of the denial of the petitioner's motion for new trial orreconsideration filed in due time after notice of the judgment. On motion duly filed
and served, with full payment of the docket and other lawful fees and the deposit for
costs before the expiration of the reglementary period, the Supreme Court may for
justifiable reasons grant an extension of thirty (30) days only within which to file the
petition.
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Local Taxation - Taxpayer's Remedies
Legal Basis
Section 195 Protest of Assessment. - When the local treasurer or his dulyauthorized representative finds that correct taxes, fees, or charges have
not been paid, he shall issue a notice of assessment stating the nature of
the tax, fee or charge, the amount of deficiency, the surcharges, interests
and penalties. Within sixty (60) days from the receipt of the notice of
assessment, the taxpayer may file a written protest with the local
treasurer contesting the assessment; otherwise, the assessment shallbecome final and executory. The local treasurer shall decide the protest
within sixty (60) days from the time of its filing. If the local treasurer finds
the protest to be wholly or partly meritorious, he shall issue a notice
canceling wholly or partially the assessment. However, if the local
treasurer finds the assessment to be wholly or partly correct, he shall
deny the protest wholly or partly with notice to the taxpayer. Thetaxpayer shall have thirty (30) days from the receipt of the denial of the
protest or from the lapse of the sixty (60) day period prescribed herein
within which to appeal with the court of competent jurisdiction
otherwise the assessment becomes conclusive and unappealable.
PROTEST ON ASSESSMENT OF LOCAL TAX
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Local Taxation - Taxpayer's Remedies
PROTEST ON ASSESSMENT OF LOCAL TAX
Local
Treasurer
Grants DeniesFails to
Decide
MTC/RTC CTA SC
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Local Taxation - Taxpayer's Remedies
Legal Basis:
Jurisprudence:
CLAIM OF REFUND
SEC. 196. Claim for Refund of Tax Credit. - No case or proceeding
shall be maintained in any court for the recovery of any tax, fee,or charge erroneously or illegally collected until a written claim
for refund or credit has been filed with the local treasurer. No
case or proceeding shall be entertained in any court after the
expiration of two (2) years from the date of the payment of such
tax, fee, or charge, or from the date the taxpayer is entitled to a
refund or credit.
TOLEDO V METRO MANILA: Based on Section 196 of R.A. No. 7160,
there are two requisites for a refund claim or tax credit of local taxes,
namely: (1) a written claim for refund or credit must be filed with thelocal treasurer before filing an action for refund with the appropriate
court; (2) the refund claim or tax credit must be filed before the court
within two (2) years from the date of payment of the tax, fee or charge .
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Local Taxation - Taxpayer's Remedies
Local Treasurer
Written
Claim for
Refund
CLAIM OF REFUND
Grants DeniesFails to
Decide
MTC/RTC CTA SC
Payment of taxwhen erroneously
charged or illegally
collected
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Real Property Taxation - Remedies
REAL PROPERTY TAXATIONREMEDIES
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1. LIEN
2. CIVIL REMEDIES
a. ADMINISTRATIVE ACTIONS
b. JUDICIAL ACTIONS
Real Property TaxationGovernment Remedies
REAL PROPERTY TAXATION REMEDIES
GOVERNMENT REMEDIES
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LIEN
Real Property TaxationGovernment Remedies
Legal Basis
SEC. 257. Local Governments Lien. - The basic real
property tax and any other tax levied under this
Title constitutes a lien on the property subject to
tax, superior to all liens, charges or
encumbrances in favor of any person,irrespective of the owner or possessor thereof,
enforceable by administrative or judicial action,
and may only be extinguished upon payment of
the tax and the related interests and expenses.
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Notice andPublication of
Delinquency
Issue Warrant ofLevy
Report of Levying
Officer10 days after receipt
of warrant by taxpayer
Public
Advertisement by
posting and
publication
Real Property TaxationGovernment Remedies
LEVY
Legal Basis: SEC. 258. Levy on Real Property
Assessor and
ROD toannotate
Issue
Warrant of
Levy
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Local Taxation - Taxpayer's Remedies
What happens after the Levy
LevyAdvertisement
Posting and
Publication
SaleTreasurer
issues a
Report
Issue
Certificate
If Payment
is made
prior to Sale
In case thereis no bidder
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JUDICIAL
Real Property TaxationGovernment Remedies
Treasurer to
submit
certified
statement
ofdelinquency
Provincial
Atty file
civil actionMTC/RTC CTA SC
Legal Basis:
SEC. 256. Remedies For The Collection Of Real Property Tax.
- For the collection of the basic real property tax and any
other tax levied under this Title, the local government unit
concerned may avail of the remedies by administrative
action thru levy on real property or by judicial action.
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Real Property TaxationTaxpayers Remedies
1. Protest on assessment of Land
Value
2. Protest on Assessment/Collection ofReal Property
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PROTEST ON ASSESSMENT OF LAND VALUE
Real Property TaxationTaxpayers Remedies
Assessment
Notice
File verified
Petition 60
Days afterNotice
Meralco v Barlis
For purposes of giving effect to such assessment, it is
deemed made when the notice is released, mailed or sent to
the taxpayer. As soon as the notice is duly served, an
obligation arises on the part of the taxpayer to pay the
amount assessed and demanded.
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PROTEST ON ASSESSMENT OF LAND VALUE
Real Property TaxationTaxpayers Remedies
Assessment
NoticeLBAA
30 Days
Meralco v Barlis
JURISDICTION OF LOCAL BOARDS OFASSESSMENT APPEALS:
The Local Board shall have the ORIGINAL
jurisdiction to hear and decide appeals of
owners/administrators of real property from the
action of the Provincial or City Assessors, or the
Municipal Assessors in the Metro Manila Area,in the assessment of their real properties, and
from the action of the Provincial or Municipal
Treasurers in the Metro Manila Area, regarding
the collection of real property taxes, special
levies, or other real property taxes under Title
Two, Book Two, RA 7160LBAA shall decide within 120 days
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PROTEST ON ASSESSMENT OF LAND VALUE
Real Property TaxationTaxpayers Remedies
Assessment
NoticeLBAA CBAA
Petition for Review
30 Days
JURISDICTION OF THE CENTRAL BOARD OF ASSESSMENT APPEALS:
The Central Board shall have exclusive jurisdiction to
hear and decide all appeals from the decisions, order
and resolutions of the Local Boards involving contestedassessments of real properties, claims for tax refund
and/or tax credits or overpayment of taxes
If the taxpayer fails to appeal in due
course, the right of the local
government to collect the taxes due
becomes absolute upon the
expiration of such period, with
respect to the taxpayersproperty
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PROTEST ON ASSESSMENT OF LAND VALUE
Real Property TaxationTaxpayers Remedies
Assessment
NoticeLBAA CBAA
CTA
en banc
A judgment or ruling of the Regional Trial Court acting in its
original jurisdiction on tax cases may be appealed to the Court in
Division within a period of thirty (30) days from receipt thereof,
pursuant to Section 9 of Republic Act ('R.A.') No. 9282
JURISDICTION OF COURT OF TAX APPEALS (en banc), RCTA,
Rule 4, Sec 2(e) Decisions of the CBAA in the exercise of its
appellate jurisdiction over cases involving the assessment and
taxation of real property originally decided by the provincial or city
board of assessment appeals
Petition for Review
on Certiorari 15Days
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PROTEST ON ASSESSMENT OF LAND VALUE
Real Property TaxationTaxpayers Remedies
Assessment
Notice
LBAAshall decide
within 120
days
CBAA CTA SC
SEC. 226. Local Board of Assessment Appeals. - Any owner or 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 may,within sixty (60) days from the date of receipt of the written notice of
assessment, appeal to the Board of Assessment appeals of the province or
city by filing a petition under oath in the form prescribed for the purpose,
together with copies of the tax declarations and such affidavits or
documents submitted in support of the appeal.
Legal Basis:
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PROTEST ON ASSESSMENT OF REAL ESTATE PROPERTY TAX
Payment
Under
Protest
Real Property TaxationTaxpayers Remedies
Protest
30 Days
Section 252, LGC
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Treasurer
decides
Grants Denies
Apply as Tax
Credit forfuture liability
PROTEST ON ASSESSMENT OF REAL ESTATE PROPERTY TAX
Fails to
Decide
Real Property TaxationTaxpayers Remedies
Payment
Under
Protest
Treasurer has
60 days todecide
Appeal
within 60
days
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Treasurer
decidesLBAA
PROTEST ON ASSESSMENT OF REAL ESTATE PROPERTY TAX
Real Property TaxationTaxpayers Remedies
Payment
Under
Protest
Appeal within
30 days
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Treasurer
decidesLBAA CBAA
PROTEST ON ASSESSMENT OF REAL ESTATE PROPERTY TAX
Real Property TaxationTaxpayers Remedies
Payment
Under
Protest
Petition for Review
30 days
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Treasurer
decideswithin 60 days
LBAA CBAA
PROTEST ON ASSESSMENT OF REAL ESTATE PROPERTY TAX
Real Property TaxationTaxpayers Remedies
CTA SC
Payment
Under
Protest
Legal Basis:
SEC. 252. Payment Under Protest. - (a) No protest shall be entertained unless the taxpayer first pays
the tax. There shall be annotated on the tax receipts the words "paid under protest". The protest in
writing must be filed within thirty (30) days from payment of the tax to the provincial, city treasurer
or municipal treasurer, in the case of a municipality within Metropolitan Manila Area, who shall
decide the protest within sixty (60) days from receipt.
(b) The tax or a portion thereof paid under protest, shall be held in trust by the treasurer concerned.(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 applied as tax credit against his existing or
future tax liability.
(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 provided for in Chapter 3, Title II, Book II
of this Code.
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Treasurer
decidesLBAA CBAA
TAX REFUND
Real Property TaxationTaxpayers Remedies
CTA SCClaim for
Refund
Legal Basis:
SEC. 253. Repayment of Excessive Collections. - When an assessment of basic real
property tax, or any other tax levied under this Title, is found to be illegal or
erroneous and the tax is accordingly reduced or adjusted, the taxpayer may file a
written claim for refund or credit for taxes and interests with the provincial or city
treasurer within two (2) years from the date the taxpayer is entitled to such
reduction or adjustment. The provincial or city treasurer shall decide the claim for
tax refund or credit within sixty (60) days from receipt thereof. In case the claim for
tax refund or credit is denied, the taxpayer may avail of the remedies as provided in
Chapter 3, Title II, Book II of this Code.
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Local Taxation - Taxpayer's Remedies
LEVY v LIEN
Tax Lien is the government's statutory right that encumbers property to secure the
ultimate payment of a tax.
The term "levy" in this narrow technical sense denotes an administrative actionby
the proper government agency (i.e., without going to court) to seize property tosatisfy a tax liability. The levy is the actual act of seizure of the property.
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Local Taxation - Taxpayer's Remedies
SEC. 226. Local Board of Assessment Appeals
vs
SEC. 195. Protest of Assessment
Assessment referred to in Sec 226 pertains to the valuation made by
the local assessor on a real property for realty tax purposes. The
appeal process is via LBAA ->CBAA
On the other hand, Sec 195 refers to the notice of assessment that the
local treasurers are required to issue upon a local tax, fee or charge
becoming delinquent. Aggrieved party may file a written protest to the
local treasurer. If the protest is denied, taxpayer may appeal to courts
of competent jurisdiction
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Local Taxation - Taxpayer's Remedies
Assessment in Sec 194
vs
Assessment in Sec 195
Assessment mentioned in Sec 194 refers to the
determination of the amount of tax base as basis for
computing tax due, which may either be by self-
assessment of the taxpayer or assessment by thetreasurer
If the assessment is by the treasurer, he is required to
issue the Notice of Assessment on the taxpayerpursuant to Sec 195, otherwise the taxes due
prescribe after 5 years from such assessment.
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Local Taxation - Taxpayer's Remedies
Effect of Appeal on Collection of Taxes
An Appeal shall not suspend the collection of the
corresponding realty taxes on the real property subject of
the appeal as assessed by the assessor concerned
without prejudice to subsequent adjustment dependingon the final outcome of the appeal.
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Local Taxation - Taxpayer's Remedies
It was an ill-advised move for Napocor to directly file an appeal with the LBAA
under Section 226 without first paying the tax as required under Section 252.
Sections 252 and 226 provide successive administrative remedies to a
taxpayer who questions the correctness of an assessment. Section 226, in
declaring that "any owner or 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 may x x x appeal to the Board of Assessment
Appeals x x x," should be read in conjunction with Section 252 (d), which
states that "in the event that the protest is denied x x x, the taxpayer may avail
of the remedies as provided for in Chapter 3, Title II, Book II of the LGC
[Chapter 3 refers to Assessment Appeals, which includes Sections 226 to
231]. The "action" referred to in Section 226 (in relation to a protest of realproperty tax assessment) thus refers to the local assessorsact of denying the
protest filed pursuant to Section 252. Without the action of the local assessor,
the appellate authority of the LBAA cannot be invoked. Napocors action
before the LBAA was thus prematurely filed.
Sec 252, LGC: PAYMENT UNDER PROTEST
General Rule
NAPOCOR v QUEZON
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Local Taxation - Taxpayer's Remedies
Sec 252, LGC: PAYMENT UNDER PROTEST
EXCEPTION: Where the petitioners are questioning the very
power of the assessor to impose the assessment, and/or the
authority of the treasurer to collect the tax as these involve
questions of law and not of fact, hence, not appealable to
LBAA
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Local Taxation - Taxpayer's Remedies
It was an ill-advised move for Napocor to directly file an appeal with the LBAA
under Section 226 without first paying the tax as required under Section 252.
Sections 252 and 226 provide successive administrative remedies to a
taxpayer who questions the correctness of an assessment. Section 226, in
declaring that "any owner or 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 may x x x appeal to the Board of Assessment
Appeals x x x," should be read in conjunction with Section 252 (d), which
states that "in the event that the protest is denied x x x, the taxpayer may avail
of the remedies as provided for in Chapter 3, Title II, Book II of the LGC
[Chapter 3 refers to Assessment Appeals, which includes Sections 226 to
231]. The "action" referred to in Section 226 (in relation to a protest of realproperty tax assessment) thus refers to the local assessorsact of denying the
protest filed pursuant to Section 252. Without the action of the local assessor,
the appellate authority of the LBAA cannot be invoked. Napocors action
before the LBAA was thus prematurely filed.
NAPOCOR v QUEZON
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Local Taxation - Taxpayer's Remedies
Sangguniang Panglungsod of the City of Makati, et al vs. Chevron Holdings, Inc., CTA
AC No. 70, October 21, 2011 & Res. Dec. 26, 2011
The issue of constitutionality or unconstitutionality of a localordinance may be invoked as a ground to protest the assessment
under Section 195 of the Local Government Code (LGC).
The City Assessors Office assessed the taxpayer for business taxes
pursuant to the Revised Makati Revenue Code (RMRC). Taxpayer filed
a protest which was later denied by the City Treasurer. The taxpayerfiled an appeal before the RTC. The City of Makati argued that
although the taxpayer used the protest against the assessment as
basis of its appeal before the RTC, the latter was actually questioning
the legality of the provision of RMRC. The City asserts that the issue of
constitutionality or unconstitutionality of a local ordinance may not beinvoked as a ground to protest assessment under Section 195 of the
LGC. The Court held that Section 195 of LGC does not enumerate nor
restrict a protest of assessment to specific grounds; thus, respondent
has the right to raise as an issue the constitutionality of the tax
ordinance, which became the sole basis of the disputed assessment
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Local Taxation - Taxpayer's Remedies
Local Tax; Notice of Garnishment deemed denial of protest. Claim for refund
not sine qua non to right toappeal; Franchise tax; Bureau of LocalGovernment Finance Opinions.
Jurisprudence dictates that a final letter for payment of delinquent taxes may
be considered a decision on a disputed or protested assessment. Hence,
the issuance of notice of Garnishment is deemed a denial of respondents
protest; The Supreme court ruled in Vda. De San Agustin vs. CIR that to
require the taxpayer to claim for refund of the taxes paid as a condition
precedent to his right to appeal, would in effect require him to go through a
useless and needless ceremony that would only delay the disposition of the
case, for the Commissioner would certainly disallow the claim for refund in
the same way, as he disallowed the protest again the assessment; Taxpayer
is not liable to pay franchise tax to the province on gross receipts realized
within the city (that is within the territory of the province); BLGF s
interpretation of local tax laws in not authoritative and persuasive. It has not
express powers to interpret the tax code and other national laws, unlike the
Commissioner of Internal Revenue. Section 195, 196, 137 and 151 of the
Local government Code.
Province of Cagayan v. Philippine Long Distance Telephone
Company, C.T.A. AC No. 63 (RTC Civil Case No. 07-077), September 15, 2010
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END