University of San CarlosSchool of Law & GovernanceCebu City

Taxation 2Case List

FINALSLOCAL GOVERNMENT TAXATION

1. MACTAN CEBU INTERNATIONAL AIRPORT AUTHORITY (MCIAA) V. CITY OF LAPU-LAPU, G.R. NO. 181756, JUNE 15, 2015Facts: Upon MCIAAs creation, it enjoyed exemption from realty taxes under RA 6958 (the law w/c created it):

Sec. 14. Tax Exemptions. The Authority shall be exempt from realty taxes imposed by the National Government or any of its political subdivisions, agencies and instrumentalities: Provided, That no tax exemption herein granted shall extend to any subsidiary which may be organized by the Authority.

Sep 11 96: this Court rendered a decision in MCIAA v. Marcos declaring that upon the effectivity of the Local Govt Code, MCIAA was no longer exempt from real estate taxes.

Jan 7 97: City issued to MCIAA a Statement of Real Estate Tax assessing the lots comprising the airport in the amount of P162,058,959.52. MCIAA complained that there were discrepancies in said statement.

Accordingly, City amended the same and sent a new statement to MCIAA in the amount of P151,376,134.66. This amount, accdg. to City, covered real estate taxes on the lots utilized solely and exclusively for public or govtl purposes such as the airfield, runway and taxiway, and the lots on which they are situated.

MCIAA paid City P4 million monthly, which was later increased to P6 million monthly.

Opinion No. 50, DOJ, Series of 1998:

You further state that among the real properties deemed transferred to MCIAA are the airfield, runway, taxiway and the lots on which the runway and taxiway are situated, the tax declarations of which were transferred in the name of the MCIAA. In 1997, the City of Lapu-Lapu imposed real estate taxes on these properties invoking the provisions of the Local Government Code.

It is your view that these properties are not subject to real property tax because they are exclusively used for airport purposes. You said that the runway and taxiway are not only used by the commercial airlines but also by the Philippine Air Force and other government agencies. As such and in conjunction with the above interpretation of Section 15 of R.A. No. 6958, you believe that these properties are considered owned by the Republic of the Philippines. Hence, this request for opinion.

The query is resolved in the affirmative. The properties used for airport purposes (i.e. airfield, runway, taxiway and the lots on which the runway and taxiway are situated) are owned by the Republic of the Philippines.

x x x x

Under the Law on Public Corporations, the legislature has complete control over the property which a municipal corporation has acquired in its public or governmental capacity and which is devoted to public or governmental use. The municipality in dealing with said property is subject to such restrictions and limitations as the legislature may impose. On the other hand, property which a municipal corporation acquired in its private or proprietary capacity, is held by it in the same character as a private individual. Hence, the legislature in dealing with such property, is subject to the constitutional restrictions concerning property (Martin, Public Corporations [1997], p. 30; see also Province of Zamboanga del [Norte] v. City of Zamboanga [131 Phil. 446]). The same may be said of properties transferred to the MCIAA and used for airport purposes, such as those involved herein. Since such properties are of public dominion, they are deemed held by the MCIAA in trust for the Government and can be alienated only as may be provided by law.

Based on the foregoing, it is our considered opinion that the properties used for airport purposes, such as the airfield, runway and taxiway and the lots on which the runway and taxiway are located, are owned by the State or by the Republic of the Philippines and are merely held in trust by the MCIAA, notwithstanding that certificates of titles thereto may have been issued in the name of the MCIAA. (Emphases added.)

Dept. of Finance issued a 2nd Indorsement to the City treasurer, Pacaldo (Aug. 3, 1998):The distinction as to which among the MCIAA properties are still considered owned by the State or by the Republic of the Philippines, such as the resolution in the above-cited DOJ Opinion No. 50, for purposes of real property tax exemption is hereby deemed tenable considering that the subject airfield, runway, taxiway and the lots on which the runway and taxiway are situated appears to be the subject of real property tax assessment and collection of the city government of Lapu-Lapu, hence, the same are definitely located within the jurisdiction of Lapu-Lapu City.

Moreover, then Undersecretary Antonio P. Belicena of the Department of Finance, in his 1st Indorsement dated May 18, 1998, advanced that this Department (DOF) interposes no objection to the request of Mactan Cebu International Airport Authority for exemption from payment of real property tax on the property used for airport purposes mentioned above.

The City Assessor, therefore, is hereby instructed to transfer the assessment of the subject airfield, runway, taxiway and the lots on which the runway and taxiway are situated, from the Taxable Roll to the Exempt Roll of real properties.

The City Treasurer thereat should be informed on the action taken for his immediate appropriate action. (Emphases added.)

Pacaldo sent MCIAA a statement of real ppt taxes balances up to the year 2002 reflecting the amount of P246,395,477.20. MCIAA claimed that the statement again included the lots utilized solely and exclusively for public purpose such as the airfield, runway, and taxiway and the lots on which these are built. Pacaldo then issued Notices of Levy on 18 sets of real properties of MCIAA.

MCIAA filed a petition for prohibition with the RTC of Lapu-Lapu with prayer for the issuance of a TRO and/or a writ of preliminary injunction, and prayed for declaration that the airport terminal bldg., airfield, runway, and taxiway and the lots are exempted from real estate taxes basing its exemption on the DOJ opinion.

RTC: issued a TRO; petitioner for prohibition enjoin City from issuing a warrant of levy against MCIAAs properties and from selling them at public auction for delinquency in realty tax obligations; granted the writ of prelim. injunction

However, RTC upon motion of respondents, lifted the writ of prelim. injunction that based on its city tax Ordinance No. 44, they are authorized to collect a rate of 1/2% from owners, executors, or administrators of any real estate lying within the jurisdiction of the City, and though the ordinance was enacted prior the LGC of 1991, to the mind of the Court (RTC) it is still a valid and effective ordinance; that the tax collected under the ordinance is within the rates prescribed by LGC, though the 25% penalty collected is higher than the 2% interest allowed under said law.

CA: MCIAA is a GOCC and its properties are subject to realty tax.

MCIAA in Motion for Recon: that it had been described by the SC as a government instrumentality, and that it followed as a logical consequence that MCIAA is exempt from the taxing powers of the City of Lapu-Lapu; that the 1996 MCIAA case had been overturned by the Court in the 2006 MIAA case; that it be declared exempt from paying the realty tax, special education fund, and interest being collected.

CA: denied the Motion applying the precedent established in the 1996 MCIAA case and refused to apply the 2006 MIAA case; that the MCIAAs airport terminal bldg., airfield, runway, taxiway, and the lots on which they are situated are not exempt from real estate tax reasoning that:Pursuant to the explicit provision of Section 193 of the LGC, exemptions previously enjoyed by persons, whether natural or juridical, like the petitioner MCIAA, are deemed withdrawn upon the effectivity of the Code. Further, the last paragraph of Section 234 of the Code also unequivocally withdrew, upon the Codes effectivity, exemptions from payment of real property taxes previously granted to natural or juridical persons, including government-owned or controlled corporations, except as provided in the said section. Petitioner MCIAA, undoubtedly a juridical person, it follows that its exemption from such tax granted under Section 14 of R.A. 6958 has been withdrawn.

x x x x

From the [1996 MCIAA] ruling, it is acknowledged that, under Section 133 of the LGC, instrumentalities were generally exempt from all forms of local government taxation, unless otherwise provided in the Code. On the other hand, Section 232 otherwise provided insofar as it allowed local government units to levy an ad valorem real property tax, irrespective of who owned the property. At the same time, the imposition of real property taxes under Section 232 is, in turn, qualified by the phrase not hereinafter specifically exempted. The exemptions from real property taxes are enumerated in Section 234 of the Code which specifically states that only real properties owned by the Republic of the Philippines or any of its political subdivisions are exempted from the payment of the tax. Clearly, instrumentalities or GOCCs do not fall within the exceptions under Section 234 of the LGC.

Thus, as ruled in the [1996 MCIAA] case, the prohibition on taxing the national government, its agencies and instrumentalities under Section 133 is qualified by Sections 232 and 234, and accordingly, the only relevant exemption now applicable to these bodies is what is now provided under Section 234(a) of the Code. It may be noted that the express withdrawal of previously granted exemptions to persons from the payment of real property tax by the LGC does not even make any distinction as to whether the exempt person is a governmental entity or not. As Sections 193 and 234 of the Code both state, the withdrawal applies to all persons, including GOCCs, thus encompassing the two classes of persons recognized under our laws, natural persons and juridical persons.

x x x x

The question of whether or not petitioner MCIAA is an instrumentality or a GOCC has already been lengthily but soundly, cogently and lucidly answered in the [1996 MCIAA] case x x x.

x x x x

Based on the foregoing, the claim of the majority of the Supreme Court in the [2006 MIAA] case that MIAA (and also petitioner MCIAA) is not a government-owned or controlled corporation but an instrumentality based on Section 2(10) of the Administrative Code of 1987 appears to be unsound. In the [2006 MIAA] case, the majority justifies MIAAs purported exemption on Section 133(o) of the Local Government Code which places agencies and instrumentalities: as generally exempt from the taxation powers of the LGUs. It further went on to hold that By express mandate of the Local Government Code, local governments cannot impose any kind of tax on national government instrumentalities like the MIAA. x x x.

The CA found that even if the ordinance was enacted prior to the effectivity of the LGC, it remained in force and effect, citing sec. 529 of the LCG and Art. 278 of the the LGCs IRRs.

CA: As regards the Special Education Funds City can still collect the addtl 1% tax on real ppt even w/o an ordinance t this effect, as this is authorized by RA 5447, as amended by PD 464 (Real Property Tax Code), w/c does not require an enabling tax ordinance; what sec. 534 of the LGC repealed was sec. 3 a(3) and b(2) of RA 5447, and not the entire law that created the Special Education Fund.

CA: Re: penalty interest, Sec. 30 of the Ordinance of the City provided for a penalty surcharge of 25% of the tax due for a given year; however, it declared that after the effectivity of the LGC, the City could only collect penalty surcharge up to the extent of 72%, covering a period of 3 years or 36 months, for the entire delinquent property. This was lower than the 25%/annum surcharge imposed by the ordinance.

CA: even if it is clear that the City has the power to impose real property taxes over MCIAA, it is also evident and categorical that, under RA 6958, the properties of MCIAA may not be conveyed or transferred to any person or entity except to the national government; that MCIAA is denied by its Charter the absolute right to dispose of its property to any person or entity except to the national government and it is not empowered to obtain loans or encumber its property without the approval of the President.

With the advent of RA 7160, the Local Government Code, the power to tax is no longer vested exclusively on Congress. LGUs, through its local legislative bodies, are now given direct authority to levy taxes, fees and other charges pursuant to Article X, Section 5 of the 1987 Constitution. And one of the most significant provisions of the LGC is the removal of the blanket inclusion of instrumentalities and agencies of the national government from the coverage of local taxation. The express withdrawal by the Code of previously granted exemptions from realty taxes applied to instrumentalities and government-owned or controlled corporations (GOCCs) such as the petitioner Mactan-Cebu International Airport Authority. Thus, petitioner MCIAA became a taxable person in view of the withdrawal of the realty tax exemption that it previously enjoyed under Section 14 of RA No. 6958 of its charter. As expressed and categorically held in the Mactan case, the removal and withdrawal of tax exemptions previously enjoyed by persons, natural or juridical, are consistent with the State policy to ensure autonomy to local governments and the objective of the Local Government Code that they enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them effective partners in the attainment of national goals.

However, in the case at bench, petitioner MCIAAs charter expressly bars the alienation or mortgage of its property to any person or entity except to the national government. Therefore, while petitioner MCIAA is a taxable person for purposes of real property taxation, respondent City of Lapu-Lapu is prohibited from seizing, selling and owning these properties by and through a public auction in order to satisfy petitioner MCIAAs tax liability.42 (Citations omitted.)

In the questioned Resolution that affirmed its questioned Decision, the CA denied MCIAAs motion for reconsideration based on the ff. grounds:First, the MCIAA case remains the controlling law on the matter as the same is the established precedent; not the MIAA case but the MCIAA case since the former, as keenly pointed out by the respondent City of Lapu-Lapu, has not yet attained finality as there is still yet a pending motion for reconsideration filed with the Supreme Court in the aforesaid case.

Second, and more importantly, the ruling of the Supreme Court in the MIAA case cannot be similarly invoked in the case at bench. The said case cannot be considered as the law of the case. The law of the case doctrine has been defined as that principle under which determinations of questions of law will generally be held to govern a case throughout all its subsequent stages where such determination has already been made on a prior appeal to a court of last resort. It is merely a rule of procedure and does not go to the power of the court, and will not be adhered to where its application will result in an unjust decision. It relates entirely to questions of law, and is confined in its operation to subsequent proceedings in the same case. According to said doctrine, whatever has been irrevocably established constitutes the law of the case only as to the same parties in the same case and not to different parties in an entirely different case. Besides, pending resolution of the aforesaid motion for reconsideration in the MIAA case, the latter case has not irrevocably established anything.

Thus, after a thorough and judicious review of the allegations in petitioners motion for reconsideration, this Court resolves to deny the same as the matters raised therein had already been exhaustively discussed in the decision sought to be reconsidered, and that no new matters were raised which would warrant the modification, much less reversal, thereof.43 (Emphasis added, citations omitted.)

MCIAAs THEORY

MCIAA claims that this Court, in the 2006 MIAA case, had expressly declared that MCIAA, while vested with corporate powers, is not considered a GOCC, but it is a government instrumentality like the Manila International Airport Authority (MIAA), Philippine Ports Authority (PPA), UP, and BSP. It alleges that asa govt instrumentality, all its airport lands and bldgs. are exempt from real estate taxes imposed by the City.

It alleges that RA 6958 placed a limitation on petitioners administration of its assets and properties as it provides under Sec. 4(e) that any asset in the international airport important to national security cannot be alienated or mortgaged by petitioner or transferred to nay entity other than the National Government.

Thus, MCIAA claims that:a. it is a government instrumentality as expressly declared by the Honorable Court in the MIAA case. As such, it is exempt from paying real estate taxes imposed by the City;b. the properties of MCIAA consisting of the airport terminal bldg., airfield runway, taxiway, including, the lots on which they are situated, are exempt from real property taxes.c. City cannot impose real property tax without any appropriate ordinanced. City cannot impose an additional 1% tax for the special education fund in the absence of any corresponding ordinancee. City cannot impose any interest sans any ordinance mandating its imposition

MCIAA claims the ff. similarities with MIAA:a. MCIAA belongs to the same class and performs identical functions as MIAAb. MCIAA is a public utility like MIAAc. MIAA was organized to operate the international and domestic airport in Paranaque City for public use, while MCIAA was organized to operate the international and domestic airport in Mactan for public purposed. Both are attached agencies of the Department of Transportation and Communications.

MCIAA claims that the purposes and objectives of the MIAAs Charter are analogous to those enumerated to its charter, specifically Sec. 3 of the RA 6958, which reads:Section 3. Primary Purposes and Objectives. The Authority shall principally undertake the economical, efficient and effective control, management and supervision of the Mactan International Airport in the Province of Cebu and the Lahug Airport in Cebu City, hereinafter collectively referred to as the airports, and such other airports as may be established in the Province of Cebu. In addition, it shall have the following objectives:ChanRoblesVirtualawlibrary

(a) To encourage, promote and develop international and domestic air traffic in the central Visayas and Mindanao regions as a means of making the regions centers of international trade and tourism, and accelerating the development of the means of transportation and communications in the country; and

(b) To upgrade the services and facilities of the airports and to formulate internationally acceptable standards of airport accommodation and service.chanroblesvirtuallawlibrary

It also claims that it has related functions, powers and duties with that of the MIAA; that like MIAA, it has police authority within its premises, as shown in their respective charters.

It submits that since it is also a government instrumentality like MIAA, the ff. conclusion arrive by the Court in the 2006 MIAA case is also applicable to MCIAA:Under Section 2(10) and (13) of the Introductory Provisions of the Administrative Code, which governs the legal relation and status of government units, agencies and offices within the entire government machinery, MIAA is a government instrumentality and not a government-owned or controlled corporation. Under Section 133(o) of the Local Government Code, MIAA as a government instrumentality is not a taxable person because it is not subject to [t]axes, fees or charges of any kind by local governments. The only exception is when MIAA leases its real property to a taxable person as provided in Section 234(a) of the Local Government Code, in which case the specific real property leased becomes subject to real estate tax. Thus, only portions of the Airport Lands and Buildings leased to taxable persons like private parties are subject to real estate tax by the City of Paraaque.

Under Article 420 of the Civil Code, the Airport Lands and Buildings of MIAA, being devoted to public use, are properties of public dominion and thus owned by the State or the Republic of the Philippines. Article 420 specifically mentions ports x x x constructed by the State, which includes public airports and seaports, as properties of public dominion and owned by the Republic. As properties of public dominion owned by the Republic, there is no doubt whatsoever that the Airport Lands and Buildings are expressly exempt from real estate tax under Section 234(a) of the Local Government Code. This Court has also repeatedly ruled that properties of public dominion are not subject to execution or foreclosure sale.49 (Emphases added.)

MCIAA insists that its properties consisting of the airport terminal bldg., airfield, runway, taxiway and the lots on which they are situated are not subject to real ppt tax because they are actually, solely and exclusively used for public purposes. They are indispensable to the operation of the airport and by their very nature, these properties are exempt from tax. Said properties belong to the State and are merely held by MCIAA in trust. As earlier mentioned, MCIAA claims that these properties are important to national security and cannot be alienated, mortgaged, or transferred to any entity except the National Government.

MCIAA prays that judgment be rendered:a. declaring it exempt from paying real property taxes as it is a government instrumentalityb. declaring the City as bereft of any authority to levy and collect the basic real property taxes for the SEF and the penalty interest for its failure to pass the corresponding tax ordinancesc. declaring, in the alternative, the airport lands and bldgs. of MCIAA as exempt from real property taxes as they are used solely and exclusively for public purpose

It likewise claims that the enactment of Ordinance No. 070-2007 is an admission on the Citys part that it must have a tax measure to be able to impose a tax or special assessment. MCIAA avers that assuming that it is a non-exempt entity or that its airport lands and buildings are not exempt, it was only upon the effectivity of the said ordinance on Jan 1 2008 that the City could properly impose the basic real ppt tax, the additional tax for the SEF, and the interest in case of nonpayment.

CITY OF LAPU-LAPUs THEORY

Issues presented: a. Whether or not MCIAA is a government instrumentality exempt from paying real property taxesb. Whether to not the City can impose realty tax, special education fund and penalty interestc. Whether or not the airport terminal bldg., airfield, runway, taxiway including the lots on which they are situated are exempt from realty taxes

Grounds relied upon:a. MCIAA is a GOCC hence not exempt from realty taxesb. terminal bldg., runway, taxiway are not exempt from realty taxesc. estoppel does not lie against the governmentd. city can collect realty tax and intereste. city can collect SEFf. MCIAA has not who's any irreparable injury warranting injunctive reliefg. MCIAA has not complied with the provision of the LGCC

The City claims that the mere mention of MCIAA in the MIAA v. CA case does not make it the controlling case on the matter. It further claims that the 1996 MCIAA case where the SC held that MCIAA is a GOCC is the controlling jurisprudence.; that MCIAA and MIAA are two very different entities; that MCIAA is a GOCC contrary to its assertions, baed on its Charter and on DOJ Opinion No. 50.; that MCIAA is an instrumentality of the govt; that its properties such as the terminal bldg., taxiway and runaway are not exempt from real property taxation.

Issue:Whether or not the above-mentioned properties of the MCIAA are subject to real property tax imposed by the City of Lapu-Lapu.

Ruling:NO. The MCIAA is an instrumentality of the government; thus, its properties actually, solely and exclusively used for public purposes, consisting of the airport terminal bldg., airfield, runway, taxiway and the lots on which they are situated, are NOT subject to real property tax and the respondent City is nit justified in collecting tax es from the former over said properties.

While it is true, as respondents allege, that the 1996 MCIAA case was cited in a long line of cases,69 still, in 2006, the Court en banc decided a case that in effect reversed the 1996 Mactan ruling. The 2006 MIAA case had, since the promulgation of the questioned Decision and Resolution, reached finality and had in fact been either affirmed or cited in numerous cases by the Court.70 The decision became final and executory on November 3, 2006.71 Furthermore, the 2006 MIAA case was decided by the Court en banc while the 1996 MCIAA case was decided by a Division. Hence, the 1996 MCIAA case should be read in light of the subsequent and unequivocal ruling in the 2006 MIAA case.

To recall, in the 2006 MIAA case, we held that MIAAs airport lands and buildings are exempt from real estate tax imposed by local governments; that it is not a GOCC but an instrumentality of the national government, with its real properties being owned by the Republic of the Philippines, and these are exempt from real estate tax. Specifically referring to petitioner, we stated as follows:chanRoblesvirtualLawlibraryMany government instrumentalities are vested with corporate powers but they do not become stock or non-stock corporations, which is a necessary condition before an agency or instrumentality is deemed a government-owned or controlled corporation. Examples are the Mactan International Airport Authority, the Philippine Ports Authority, the University of the Philippines and Bangko Sentral ng Pilipinas. All these government instrumentalities exercise corporate powers but they are not organized as stock or non-stock corporations as required by Section 2(13) of the Introductory Provisions of the Administrative Code. These government instrumentalities are sometimes loosely called government corporate entities. However, they are not government-owned or controlled corporations in the strict sense as understood under the Administrative Code, which is the governing law defining the legal relationship and status of government entities.72 (Emphases ours.)

The Court emphasized that the airport lands and buildings of MIAA are owned by the Republic and belong to the public domain. The Court said:chanRoblesvirtualLawlibraryThe Airport Lands and Buildings of MIAA are property of public dominion and therefore owned by the State or the Republic of the Philippines. x x x.

x x x x

No one can dispute that properties of public dominion mentioned in Article 420 of the Civil Code, like roads, canals, rivers, torrents, ports and bridges constructed by the State, are owned by the State. The term ports includes seaports and airports. The MIAA Airport Lands and Buildings constitute a port constructed by the State. Under Article 420 of the Civil Code, the MIAA Airport Lands and Buildings are properties of public dominion and thus owned by the State or the Republic of the Philippines.

The Airport Lands and Buildings are devoted to public use because they are used by the public for international and domestic travel and transportation. The fact that the MIAA collects terminal fees and other charges from the public does not remove the character of the Airport Lands and Buildings as properties for public use. x x x.

x x x x

The terminal fees MIAA charges to passengers, as well as the landing fees MIAA charges to airlines, constitute the bulk of the income that maintains the operations of MIAA. The collection of such fees does not change the character of MIAA as an airport for public use. Such fees are often termed users tax. This means taxing those among the public who actually use a public facility instead of taxing all the public including those who never use the particular public facility. A users tax is more equitable - a principle of taxation mandated in the 1987 Constitution.

The Airport Lands and Buildings of MIAA x x x are properties of public dominion because they are intended for public use. As properties of public dominion, they indisputably belong to the State or the Republic of the Philippines.76 (Emphases supplied, citations omitted.)The Court also held in the 2006 MIAA case that airport lands and buildings are outside the commerce of man.As properties of public dominion, the Airport Lands and Buildings are outside the commerce of man. The Court has ruled repeatedly that properties of public dominion are outside the commerce of man. As early as 1915, this Court already ruled in Municipality of Cavite v. Rojas that properties devoted to public use are outside the commerce of man, thus:ChanRoblesVirtualawlibrary

x x x x

The Civil Code, Article 1271, prescribes that everything which is not outside the commerce of man may be the object of a contract, x x x.

x x x x

The Court has also ruled that property of public dominion, being outside the commerce of man, cannot be the subject of an auction sale.

Properties of public dominion, being for public use, are not subject to levy, encumbrance or disposition through public or private sale. Any encumbrance, levy on execution or auction sale of any property of public dominion is void for being contrary to public policy. Essential public services will stop if properties of public dominion are subject to encumbrances, foreclosures and auction sale. This will happen if the City of Paraaque can foreclose and compel the auction sale of the 600-hectare runway of the MIAA for non-payment of real estate tax.

Before MIAA can encumber the Airport Lands and Buildings, the President must first withdraw from public use the Airport Lands and Buildings. x x x.

x x x x

Thus, unless the President issues a proclamation withdrawing the Airport Lands and Buildings from public use, these properties remain properties of public dominion and are inalienable. Since the Airport Lands and Buildings are inalienable in their present status as properties of public dominion, they are not subject to levy on execution or foreclosure sale. As long as the Airport Lands and Buildings are reserved for public use, their ownership remains with the State or the Republic of the Philippines.

The authority of the President to reserve lands of the public domain for public use, and to withdraw such public use, is reiterated in Section 14, Chapter 4, Title I, Book III of the Administrative Code of 1987, which states:chanRoblesvirtualLawlibrarySEC. 14. Power to Reserve Lands of the Public and Private Domain of the Government. - (1) The President shall have the power to reserve for settlement or public use, and for specific public purposes, any of the lands of the public domain, the use of which is not otherwise directed by law. The reserved land shall thereafter remain subject to the specific public purpose indicated until otherwise provided by law or proclamation;x x x x

There is no question, therefore, that unless the Airport Lands and Buildings are withdrawn by law or presidential proclamation from public use, they are properties of public dominion, owned by the Republic and outside the commerce of man.77Thus, the Court held that MIAA is merely holding title to the Airport Lands and Buildings in trust for the Republic. [Under] Section 48, Chapter 12, Book I of the Administrative Code [which] allows instrumentalities like MIAA to hold title to real properties owned by the Republic.78chanrobleslaw

The Court in the 2006 MIAA case cited Section 234(a) of the Local Government Code and held that said provision exempts from real estate tax any [r]eal property owned by the Republic of the Philippines.79 The Court emphasized, however, that portions of the Airport Lands and Buildings that MIAA leases to private entities are not exempt from real estate tax. The Court further held:chanRoblesvirtualLawlibraryThis exemption should be read in relation with Section 133(o) of the same Code, which prohibits local governments from imposing [t]axes, fees or charges of any kind on the National Government, its agencies and instrumentalities x x x. The real properties owned by the Republic are titled either in the name of the Republic itself or in the name of agencies or instrumentalities of the National Government. The Administrative Code allows real property owned by the Republic to be titled in the name of agencies or instrumentalities of the national government. Such real properties remain owned by the Republic and continue to be exempt from real estate tax.

The Republic may grant the beneficial use of its real property to an agency or instrumentality of the national government. This happens when title of the real property is transferred to an agency or instrumentality even as the Republic remains the owner of the real property. Such arrangement does not result in the loss of the tax exemption. Section 234(a) of the Local Government Code states that real property owned by the Republic loses its tax exemption only if the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person. MIAA, as a government instrumentality, is not a taxable person under Section 133(o) of the Local Government Code. Thus, even if we assume that the Republic has granted to MIAA the beneficial use of the Airport Lands and Buildings, such fact does not make these real properties subject to real estate tax.

However, portions of the Airport Lands and Buildings that MIAA leases to private entities are not exempt from real estate tax. For example, the land area occupied by hangars that MIAA leases to private corporations is subject to real estate tax. In such a case, MIAA has granted the beneficial use of such land area for a consideration to a taxable person and therefore such land area is subject to real estate tax. x x x.80Significantly, the Court reiterated the above ruling and applied the same reasoning in Manila International Airport Authority v. City of Pasay,81 thus:chanRoblesvirtualLawlibrary

The only difference between the 2006 MIAA case and this case is that the 2006 MIAA case involved airport lands and buildings located in Paraaque City while this case involved airport lands and buildings located in Pasay City. The 2006 MIAA case and this case raised the same threshold issue: whether the local government can impose real property tax on the airport lands, consisting mostly of the runways, as well as the airport buildings, of MIAA. x x x.

x x x x

The definition of instrumentality under Section 2(10) of the Introductory Provisions of the Administrative Code of 1987 uses the phrase includes x x x government-owned or controlled corporations which means that a government instrumentality may or may not be a government-owned or controlled corporation. Obviously, the term government instrumentality is broader than the term government-owned or controlled corporation. x x x.

x x x x

The fact that two terms have separate definitions means that while a government instrumentality may include a government-owned or controlled corporation, there may be a government instrumentality that will not qualify as a government-owned or controlled corporation.

A close scrutiny of the definition of government-owned or controlled corporation in Section 2(13) will show that MIAA would not fall under such definition. MIAA is a government instrumentality that does not qualify as a government-owned or controlled corporation. x x x.

x x x x

Thus, MIAA is not a government-owned or controlled corporation but a government instrumentality which is exempt from any kind of tax from the local governments. Indeed, the exercise of the taxing power of local government units is subject to the limitations enumerated in Section 133 of the Local Government Code. Under Section 133(o) of the Local Government Code, local government units have no power to tax instrumentalities of the national government like the MIAA. Hence, MIAA is not liable to pay real property tax for the NAIA Pasay properties.

Furthermore, the airport lands and buildings of MIAA are properties of public dominion intended for public use, and as such are exempt from real property tax under Section 234(a) of the Local Government Code. However, under the same provision, if MIAA leases its real property to a taxable person, the specific property leased becomes subject to real property tax. In this case, only those portions of the NAIA Pasay properties which are leased to taxable persons like private parties are subject to real property tax by the City of Pasay. (Emphases added, citations omitted.)The Court not only mentioned petitioner MCIAA as similarly situated as MIAA. It also mentioned several other government instrumentalities, among which was the Philippine Fisheries Development Authority. Thus, applying the 2006 MIAA ruling, the Court, in Philippine Fisheries Development Authority v. Court of Appeals,82 held:chanRoblesvirtualLawlibraryOn the basis of the parameters set in the MIAA case, the Authority should be classified as an instrumentality of the national government. As such, it is generally exempt from payment of real property tax, except those portions which have been leased to private entities.

In the MIAA case, petitioner Philippine Fisheries Development Authority was cited as among the instrumentalities of the national government. x x x.

x x x x

Indeed, the Authority is not a GOCC but an instrumentality of the government. The Authority has a capital stock but it is not divided into shares of stocks. Also, it has no stockholders or voting shares. Hence, it is not a stock corporation. Neither [is it] a non-stock corporation because it has no members.

The Authority is actually a national government instrumentality which is defined as an agency of the national government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. When the law vests in a government instrumentality corporate powers, the instrumentality does not become a corporation. Unless the government instrumentality is organized as a stock or non-stock corporation, it remains a government instrumentality exercising not only governmental but also corporate powers.

Thus, the Authority which is tasked with the special public function to carry out the governments policy to promote the development of the countrys fishing industry and improve the efficiency in handling, preserving, marketing, and distribution of fish and other aquatic products, exercises the governmental powers of eminent domain, and the power to levy fees and charges. At the same time, the Authority exercises the general corporate powers conferred by laws upon private and government-owned or controlled corporations.

x x x x

In light of the foregoing, the Authority should be classified as an instrumentality of the national government which is liable to pay taxes only with respect to the portions of the property, the beneficial use of which were vested in private entities. When local governments invoke the power to tax on national government instrumentalities, such power is construed strictly against local governments. The rule is that a tax is never presumed and there must be clear language in the law imposing the tax. Any doubt whether a person, article or activity is taxable is resolved against taxation. This rule applies with greater force when local governments seek to tax national government instrumentalities.

Thus, the real property tax assessments issued by the City of Iloilo should be upheld only with respect to the portions leased to private persons. In case the Authority fails to pay the real property taxes due thereon, said portions cannot be sold at public auction to satisfy the tax delinquency. x x x.

x x x x

In sum, the Court finds that the Authority is an instrumentality of the national government, hence, it is liable to pay real property taxes assessed by the City of Iloilo on the IFPC only with respect to those portions which are leased to private entities. Notwithstanding said tax delinquency on the leased portions of the IFPC, the latter or any part thereof, being a property of public domain, cannot be sold at public auction. This means that the City of Iloilo has to satisfy the tax delinquency through means other than the sale at public auction of the IFPC. (Citations omitted.)Another government instrumentality specifically mentioned in the 2006 MIAA case was the Philippine Ports Authority (PPA). Hence, in Curata v. Philippine Ports Authority,83 the Court held that the PPA is similarly situated as MIAA, and ruled in this wise:chanRoblesvirtualLawlibraryThis Courts disquisition in Manila International Airport Authority v. Court of Appeals ruling that MIAA is not a government-owned and/or controlled corporation (GOCC), but an instrumentality of the National Government and thus exempt from local taxation, and that its real properties are owned by the Republic of the Philippines is instructive. x x x. These findings are squarely applicable to PPA, as it is similarly situated as MIAA. First, PPA is likewise not a GOCC for not having shares of stocks or members. Second, the docks, piers and buildings it administers are likewise owned by the Republic and, thus, outside the commerce of man. Third, PPA is a mere trustee of these properties. Hence, like MIAA, PPA is clearly a government instrumentality, an agency of the government vested with corporate powers to perform efficiently its governmental functions.

Therefore, an undeniable conclusion is that the funds of PPA partake of government funds, and such may not be garnished absent an allocation by its Board or by statutory grant. If the PPA funds cannot be garnished and its properties, being government properties, cannot be levied via a writ of execution pursuant to a final judgment, then the trial court likewise cannot grant discretionary execution pending appeal, as it would run afoul of the established jurisprudence that government properties are exempt from execution. What cannot be done directly cannot be done indirectly. (Citations omitted.)

All the more do we find that petitioner MCIAA, with its many similarities to the MIAA, should be classified as a government instrumentality, as its properties are being used for public purposes, and should be exempt from real estate taxes. This is not to derogate in any way the delegated authority of local government units to collect realty taxes, but to uphold the fundamental doctrines of uniformity in taxation and equal protection of the laws, by applying all the jurisprudence that have exempted from said taxes similar authorities, agencies, and instrumentalities, whether covered by the 2006 MIAA ruling or not.

To reiterate, petitioner MCIAA is vested with corporate powers but it is not a stock or non-stock corporation, which is a necessary condition before an agency or instrumentality is deemed a government-owned or controlled corporation. Like MIAA, petitioner MCIAA has capital under its charter but it is not divided into shares of stock. It also has no stockholders or voting shares. Republic Act No. 6958 provides:chanRoblesvirtualLawlibrary

Section 9. Capital. The [Mactan-Cebu International Airport] Authority shall have an authorized capital stock equal to and consisting of:ChanRoblesVirtualawlibrary

(a) The value of fixed assets (including airport facilities, runways and equipment) and such other properties, movable and immovable, currently administered by or belonging to the airports as valued on the date of the effectivity of this Act;

(b) The value of such real estate owned and/or administered by the airports; and

(c) Government contribution in such amount as may be deemed an appropriate initial balance. Such initial amount, as approved by the President of the Philippines, which shall be more or less equivalent to six (6) months working capital requirement of the Authority, is hereby authorized to be appropriated in the General Appropriations Act of the year following its enactment into law.chanroblesvirtuallawlibraryThereafter, the government contribution to the capital of the Authority shall be provided for in the General Appropriations Act.

Like in MIAA, the airport lands and buildings of MCIAA are properties of public dominion because they are intended for public use. As properties of public dominion, they indisputably belong to the State or the Republic of the Philippines, and are outside the commerce of man. This, unless petitioner leases its real property to a taxable person, the specific property leased becomes subject to real property tax; in which case, only those portions of petitioners properties which are leased to taxable persons like private parties are subject to real property tax by the City of Lapu-Lapu.

We hereby adopt and apply to petitioner MCIAA the findings and conclusions of the Court in the 2006 MIAA case, and we quote:chanRoblesvirtualLawlibraryTo summarize, MIAA is not a government-owned or controlled corporation under Section 2(13) of the Introductory Provisions of the Administrative Code because it is not organized as a stock or non-stock corporation. Neither is MIAA a government-owned or controlled corporation under Section 16, Article XII of the 1987 Constitution because MIAA is not required to meet the test of economic viability. MIAA is a government instrumentality vested with corporate powers and performing essential public services pursuant to Section 2(10) of the Introductory Provisions of the Administrative Code. As a government instrumentality, MIAA is not subject to any kind of tax by local governments under Section 133(o) of the Local Government Code. The exception to the exemption in Section 234(a) does not apply to MIAA because MIAA is not a taxable entity under the Local Government Code. Such exception applies only if the beneficial use of real property owned by the Republic is given to a taxable entity.

Finally, the Airport Lands and Buildings of MIAA are properties devoted to public use and thus are properties of public dominion. Properties of public dominion are owned by the State or the Republic. x x x.

x x x x

The term ports x x x constructed by the State includes airports and seaports. The Airport Lands and Buildings of MIAA are intended for public use, and at the very least intended for public service. Whether intended for public use or public service, the Airport Lands and Buildings are properties of public dominion. As properties of public dominion, the Airport Lands and Buildings are owned by the Republic and thus exempt from real estate tax under Section 234(a) of the Local Government Code.

4. Conclusion

Under Section 2(10) and (13) of the Introductory Provisions of the Administrative Code, which governs the legal relation and status of government units, agencies and offices within the entire government machinery, MIAA is a government instrumentality and not a government-owned or controlled corporation. Under Section 133(o) of the Local Government Code, MIAA as a government instrumentality is not a taxable person because it is not subject to [t]axes, fees or charges of any kind by local governments. The only exception is when MIAA leases its real property to a taxable person as provided in Section 234(a) of the Local Government Code, in which case the specific real property leased becomes subject to real estate tax. Thus, only portions of the Airport Lands and Buildings leased to taxable persons like private parties are subject to real estate tax by the City of Paraaque.

Under Article 420 of the Civil Code, the Airport Lands and Buildings of MIAA, being devoted to public use, are properties of public dominion and thus owned by the State or the Republic of the Philippines. Article 420 specifically mentions ports x x x constructed by the State, which includes public airports and seaports, as properties of public dominion and owned by the Republic. As properties of public dominion owned by the Republic, there is no doubt whatsoever that the Airport Lands and Buildings are expressly exempt from real estate tax under Section 234(a) of the Local Government Code. This Court has also repeatedly ruled that properties of public dominion are not subject to execution or foreclosure sale.85 (Emphases added.)

2. SMART COMMUNICATIONS, INC. V. MUNICIPALITY OF MALVAR, BATANGAS, G.R. NO. 20442. FEBRUARY 18, 2014Facts: Facts: Smart constructed a telecom tower within the territorial jurisdiction of the municipality; it was for the receiving and transmitting cellular communications within the covered area.

Jul 30, 03: Municipality passed Ordinance No. 18, s. 2003 regulating establishment of special projects

Aug 24 04: Smart received an assessment letter from the permit and Licensing Division of the Office of the Mayor of the municipality with a schedule of payment for the total amt. of P389,950.00 for the tower.

Due to the alleged arrears in the payment of the assessment, the Mun. also caused the posting of a closure notice on the tower.

Sep 9 04: Smart filed a protest, claiming lack of due process in the issuance of the assessment and closure notice; challenged the validity of the ordinance on which the assessment was based.

Municipality denied the protest

Nov 17 04: Smart filed with the RTC an appeal/petition assailing the validity of the ordinance.

TC: assessment from 2001 to 2003 was void since the ordinance was approved only on July 30 2003; assessment starting Oct 1 2003 valid; did not rule on the validity of the ordinance.

CTA: denied petition for Review for lack of jurisdiction; that it is a court of special jurisdiction and as such, it can take cognizance only of such matters as are clearly within its jurisdiction; that it has exclusive appellate jurisdiction to review on appeal, decisions, orders or resolutions of the RTCs in local taxes original resolved by them in the exercise of their original or appellate jurisdiction, and not to resolve cases where the constitutionality of a law or rule is challenged.

Issue:Whether or not the RTC resolved a local tax case in order to fall within the ambit of the CTAs jurisdiction.

Ruling:No. The Court finds that the fees imposed under Ordinance No. 18 are not taxes.Section 5, Article X of the 1987 Constitution provides that "each local government unit shall have the power to create its own sources of revenues and to levy taxes, fees, and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively to the local government."

Consistent with this constitutional mandate, the LGC grants the taxing powers to each local government unit. Specifically, Section 142 of the LGC grants municipalities the power to levy taxes, fees, and charges not otherwise levied by provinces. Section 143 of the LGC provides for the scale of taxes on business that may be imposed by municipalities17 while Section 14718 of the same law provides for the fees and charges that may be imposed by municipalities on business and occupation.The LGC defines the term "charges" as referring to pecuniary liability, as rents or fees against persons or property, while the term "fee" means "a charge fixed by law or ordinance for the regulation or inspection of a business or activity."19

In this case, the Municipality issued Ordinance No. 18, which is entitled "An Ordinance Regulating the Establishment of Special Projects," to regulate the "placing, stringing, attaching, installing, repair and construction of all gas mains, electric, telegraph and telephone wires, conduits, meters and other apparatus, and provide for the correction, condemnation or removal of the same when found to be dangerous, defective or otherwise hazardous to the welfare of the inhabitant[s]."20 It was also envisioned to address the foreseen "environmental depredation" to be brought about by these "special projects" to the Municipality.21 Pursuant to these objectives, the Municipality imposed fees on various structures, which included telecommunications towers.

As clearly stated in its whereas clauses, the primary purpose of Ordinance No. 18 is to regulate the "placing, stringing, attaching, installing, repair and construction of all gas mains, electric, telegraph and telephone wires, conduits, meters and other apparatus" listed therein, which included Smarts telecommunications tower. Clearly, the purpose of the assailed Ordinance is to regulate the enumerated activities particularly related to the construction and maintenance of various structures. The fees in Ordinance No. 18 are not impositions on the building or structure itself; rather, they are impositions on the activity subject of government regulation, such as the installation and construction of the structures.22Since the main purpose of Ordinance No. 18 is to regulate certain construction activities of the identified special projects, which included "cell sites" or telecommunications towers, the fees imposed in Ordinance No. 18 are primarily regulatory in nature, and not primarily revenue-raising. While the fees may contribute to the revenues of the Municipality, this effect is merely incidental. Thus, the fees imposed in Ordinance No. 18 are not taxes.In Progressive Development Corporation v. Quezon City,23 the Court declared that "if the generating of revenue is the primary purpose and regulation is merely incidental, the imposition is a tax; but if regulation is the primary purpose, the fact that incidentally revenue is also obtained does not make the imposition a tax."

In Victorias Milling Co., Inc. v. Municipality of Victorias,24 the Court reiterated that the purpose and effect of the imposition determine whether it is a tax or a fee, and that the lack of any standards for such imposition gives the presumption that the same is a tax.

We accordingly say that the designation given by the municipal authorities does not decide whether the imposition is properly a license tax or a license fee. The determining factors are the purpose and effect of the imposition as may be apparent from the provisions of the ordinance. Thus, "[w]hen no police inspection, supervision, or regulation is provided, nor any standard set for the applicant to establish, or that he agrees to attain or maintain, but any and all persons engaged in the business designated, without qualification or hindrance, may come, and a license on payment of the stipulated sum will issue, to do business, subject to no prescribed rule of conduct and under no guardian eye, but according to the unrestrained judgment or fancy of the applicant and licensee, the presumption is strong that the power of taxation, and not the police power, is being exercised."

Contrary to Smarts contention, Ordinance No. 18 expressly provides for the standards which Smart must satisfy prior to the issuance of the specified permits, clearly indicating that the fees are regulatory in nature.

3. THE CITY OF MANILA, ETC. ET AL. V. HON. CARIDAD H. GRECIA-CUERDO ETC., ET AL,G.R. NO. 175723. FEBRUARY 4, 2014.Facts: City of Manila, through its treasurer, Toledo, assessed taxes for the taxable period from Jan to Dec 2002 against private respondents. In addition to the taxes due pursuant to sec. 14, 15, 16, 17 of the Revised Revenue Code of Manila (RCCM), said assessment covered the local business taxes the petitioners were auhorized to collect under Sec. 21 of the same Code. Because payment of the taxes assessed was a precondition for the issuance of their business permits, private respondents were constrained to pay the P 19,316,458.77 assessment under protest.

Jan 24 04: private respondents filed with the RTC the complaint denominated as one for Refund or Recovery of Illegally and/or ErroneouslyCollected Local Business Tax, Prohibition with Prayer to Issue TRO and Writ of Preliminary Injunction. In the amended complaint they filed on Feb 16 04, private respondents alleged that, in relation to Section 21 thereof, Sections 14, 15, 16, 17, 18, 19 and 20 of the RRCM were violative of the limitations and guidelines under Section 143 (h) of Republic Act. No. 7160 [Local Government Code] on double taxation; that the Citys Ordinance No. 8011 which amended pertinent portions of the RRCM had already been declared to be illegal and unconstitutional by the Department of Justice.

RTC: granted private respondents application for a writ of prelim. injunction.

The City filed a Motion for Recon but denied.

The City filed a special civil action for certiorari wit the CA.

CA: dismissed the Citys petition for certiorari holding that it has no jurisdiction over the said petition; that since the appellate jurisdiction over pvt. respondents complaint for tax refund, which was filed with the RTC, is vested in the CTA, it follows that a petition for certiorari seeking nullification of an interlocutory order in the said case should, likewise, be filed with the CTA.

Issue:Whether or not the CTA has jurisdiction over a petition for certiorari assailing an interlocutory order by the RTC.

Ruling:***This Court finds the instant petition moot and academic, but they furthered with a discussion.

In view of the foregoing, it clearly appears that the issues raised in the present petition, which merely involve the incident on the preliminary injunction issued by the RTC, have already become moot and academic considering that the trial court, in its decision on the merits in the main case, has already ruled in favor of respondents and that the same decision is now final and executory. Well entrenched is the rule that where the issues have become moot and academic, there is no justiciable controversy, thereby rendering the resolution of the same of no practical use or value.

Petitioners availed of the wrong remedy when they filed the instant special civil action for certiorari under Rule 65 of the Rules of Court in assailing the Resolutions of the CA which dismissed their petition filed with the said court and their motion for reconsideration of such dismissal. There is no dispute that the assailed Resolutions of the CA are in the nature of a final order as they disposed of the petition completely. It is settled that in cases where an assailed judgment or order is considered final, the remedy of the aggrieved party is appeal. Hence, in the instant case, petitioner should have filed a petition for review on certiorari under Rule 45, which is a continuation of the appellate process over the original case.

Back to the issue:YES.

Based on the provisions of RA 1125, expanding the jurisdiction of the CTA, such court has exclusive appellate jurisdiction over decisions, orders or resolutions of the RTCs in local tax cases originally decided or resolved by them in the exercise of their original or appellate jurisdiction,there is no categorical statement under RA 1125 as well as the amendatory RA 9282, which provides that the CTA has jurisdiction over petitions for certiorari assailing interlocutory orders issued by the RTC in local tax cases filed before it.

The prevailing doctrine is that the authority to issue writs of certiorari involves the exercise of original jurisdiction which must be expressly conferred by the Constitution or by law and cannot be implied from the mere

existence of appellate jurisdiction.20 Thus, in the cases of Pimentel v. COMELEC,21Garcia v. De Jesus,22Veloria v. COMELEC,23Department of Agrarian Reform Adjudication Board v. Lubrica,24 and Garcia v. Sandiganbayan,25 this Court has ruled against the jurisdiction of courts or tribunals over petitions for certiorari on the ground that there is no law which expressly gives these tribunals such power.26 It must be observed, however, that with the exception of Garcia v. Sandiganbayan,27 these rulings pertain not to regular courts but to tribunals exercising quasijudicial powers. With respect to the Sandiganbayan, Republic Act No. 824928 now provides that the special criminal court has exclusive original jurisdiction over petitions for the issuance of the writs of mandamus, prohibition, certiorari,habeas corpus, injunctions, and other ancillary writs and processes in aid of its appellate jurisdiction.

In the same manner, Section 5 (1), Article VIII of the 1987 Constitution grants power to the Supreme Court, in the exercise of its original jurisdiction, to issue writs of certiorari, prohibition and mandamus. With respect to the Court of Appeals, Section 9 (1) of Batas Pambansa Blg. 129 (BP 129) gives the appellate court, also in the exercise of its original jurisdiction, the power to issue, among others, a writ of certiorari,whether or not in aid of its appellate jurisdiction. As to Regional Trial Courts, the power to issue a writ of certiorari, in the exercise of their original jurisdiction, is provided under Section 21 of BP 129.

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.

Indeed, in order for any appellate court to effectively exercise its appellate jurisdiction, it must have the authority to issue, among others, a writ of certiorari. In transferring exclusive jurisdiction over appealed tax cases to the CTA, it can reasonably be assumed that the law intended to transfer also such power as is deemed necessary, if not indispensable, in aid of such appellate jurisdiction. There is no perceivable reason why the transfer should only be considered as partial, not total.

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 splitjurisdiction situation which is anathema to the orderly administration of justice.35 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.

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.

Indeed, courts possess certain inherent powers which may be said to be implied from a general grant of jurisdiction, in addition to those expressly conferred on them. These inherent powers are such powers as are necessary for the ordinary and efficient exercise of jurisdiction; or are essential to the existence, dignity and functions of the courts, as well as to the due administration of justice; or are directly appropriate, convenient and suitable to the execution of their granted powers; and include the power to maintain the courts jurisdiction and render it effective in behalf of the litigants.38

Thus, this Court has held that while a court may be expressly granted the incidental powers necessary to effectuate its jurisdiction, a grant of jurisdiction, in the absence of prohibitive legislation, implies the necessary and usual incidental powers essential to effectuate it, and, subject to existing laws and constitutional provisions, every regularly constituted court has power to do all things that are reasonably necessary for the administration of justice within the scope of its jurisdiction and for the enforcement of its judgments and mandates.39 Hence, demands, matters or questions ancillary or incidental to, or growing out of, the main action, and coming within the above principles, may be taken cognizance of by the court and determined, since such jurisdiction is in aid of its authority over the principal matter, even though the court may thus be called on to consider and decide matters which, as original causes of action, would not be within its cognizance.40

Based on the foregoing disquisitions, it can be reasonably concluded that the authority of the CTA to take cognizance of petitions for certiorari questioning interlocutory orders issued by the RTC in a local tax case is included in the powers granted by the Constitution as well as inherent in the exercise of its appellate jurisdiction.

Finally, it would bear to point out that this Court is not abandoning the rule that, insofar as quasijudicial tribunals are concerned, the authority to issue writs of certiorari must still be expressly conferred by the Constitution or by law and cannot be implied from the mere existence of their appellate jurisdiction. This doctrine remains as it applies only to quasijudicial bodies.

4. GOVERNMENT SERVICE INSURANCE SYSTEM VS. CITY TREASURER AND CITY ASSESSOR OF THE CITY OF MANILA,G.R. NO. 186242, DECEMBER 23, 2009.Facts: GSIS owns or used to own 2 parcels of land, the Katigbak and Concepcion-Arroceros (C-A) properties, respectively. Title to C-A property was transferred to the Supreme Court in 2005 pursuant to Proc. No. 835 dated Apr 27 05. Both the GSIS and the MeTC of Manila occupy the C-A ppt, while the Katigbak property was under lease.

The City addressed a letter to GSIS informing it of the unpaid real ppt taxes due on the aforementioned properties for years 1992-2002. The letter warned of the inclusion of the subj. properties in the scheduled public auction (Oct 30 2002) of all delinquent properties in Manila should the unpaid taxes remain unsettled before the the auction date.

Sep 16 02: the City Treasurer issued separate Notices of Real Tax Delinquency for the subj properties, with the usual warning go seizure and/or sale. GSIS wrote back emphasizing its exemption from all kinds of taxes, including realty taxes, under RA 8291.

RTC: dismissed the petition.

Issues:a. Whether or not GSIS under its charter is exempt from RPTb. Assuming that it is exempt, whether or not GSIS is liable fore RPT for its properties leased to a taxable entity

Ruling:a. Yes.

CA 186 of 1936 GSIS exempt from any legal process and liens but only for insurance policies and their proceeds

PD 1146 of 1977 Revised Government Service Insurance Act of 1977: GSIS still exempt

RA 7160 or the LGC Congress intended to withdraw, subject to certain defined exceptions, tax exemptions granted prior the passage of RA 7160. The question is: whether or not the full tax exemption heretofore granted to GSIS under PD 1146, particularly insofar as realty tax is concerned, was deemed withdrawn. The SC answered in the affirmative.

BUT! GSIS was again granted full tax exemption through RA 8291.

Under it, the full tax exemption privilege of GSIS was restored, the operative provision being Sec. 39 thereof, a virtual replication of the earlier quoted Sec. 33 of PD 1146. Sec. 39 of RA 8291 reads:SEC. 39. Exemption from Tax, Legal Process and Lien. It is hereby declared to be the policy of the State that the actuarial solvency of the funds of the GSIS shall be preserved and maintained at all times and that contribution rates necessary to sustain the benefits under this Act shall be kept as low as possible in order not to burden the members of the GSIS and their employers. Taxes imposed on the GSIS tend to impair the actuarial solvency of its funds and increase the contribution rate necessary to sustain the benefits of this Act. Accordingly, notwithstanding, any laws to the contrary, the GSIS, its assets, revenues including all accruals thereto, and benefits paid, shall be exempt from all taxes, assessments, fees, charges or duties of all kinds. These exemptions shall continue unless expressly and specifically revoked and any assessment against the GSIS as of the approval of this Act are hereby considered paid. Consequently, all laws, ordinances, regulations, issuances, opinions or jurisprudence contrary to or in derogation of this provision are hereby deemed repealed, superseded and rendered ineffective and without legal force and effect.Moreover, these exemptions shall not be affected by subsequent laws to the contrary unless this section is expressly, specifically and categorically revoked or repealed by law and a provision is enacted to substitute or replace the exemption referred to herein as an essential factor to maintain or protect the solvency of the fund, notwithstanding and independently of the guaranty of the national government to secure such solvency or liability.The funds and/or the properties referred to herein as well as the benefits, sums or monies corresponding to the benefits under this Act shall be exempt from attachment, garnishment, execution, levy or other processes issued by the courts, quasi-judicial agencies or administrative bodies including Commission on Audit (COA) disallowances and from all financial obligations of the members, including his pecuniary accountability arising from or caused or occasioned by his exercise or performance of his official functions or duties, or incurred relative to or in connection with his position or work except when his monetary liability, contractual or otherwise, is in favor of the GSIS. (Emphasis ours.)

The foregoing exempting proviso, couched as it were in an encompassing manner, brooks no other construction but that GSIS is exempt from all forms of taxes. While not determinative of this case, it is to be noted that prominently added in GSIS present charter is a paragraph precluding any implied repeal of the tax-exempt clause so as to protect the solvency of GSIS funds. Moreover, an express repeal by a subsequent law would not suffice to affect the full exemption benefits granted the GSIS, unless the following conditionalities are met: (1) The repealing clause must expressly, specifically, and categorically revoke or repeal Sec. 39; and (2) a provision is enacted to substitute or replace the exemption referred to herein as an essential factor to maintain or protect the solvency of the fund. These restrictions for a future express repeal, notwithstanding, do not make the proviso an irrepealable law, for such restrictions do not impinge or limit the carte blanche legislative authority of the legislature to so amend it. The restrictions merely enhance other provisos in the law ensuring the solvency of the GSIS fund.Given the foregoing perspectives, the following may be assumed: (1) Pursuant to Sec. 33 of PD 1146, GSIS enjoyed tax exemption from real estate taxes, among other tax burdens, until January 1, 1992 when the LGC took effect and withdrew exemptions from payment of real estate taxes privileges granted under PD 1146; (2) RA 8291 restored in 1997 the tax exempt status of GSIS by reenacting under its Sec. 39 what was once Sec. 33 of P.D. 1146; and (3) If any real estate tax is due to the City of Manila, it is, following City of Davao, only for the interim period, or from 1992 to 1996, to be precise.

b. Yes. But, not liable to pay.

Beneficial Use Doctrine

The foregoing notwithstanding, the leased Katigbak property shall be taxable pursuant to the beneficial use principle under Sec. 234(a) of the LGC.It is true that said Sec. 234(a), quoted below, exempts from real estate taxes real property owned by the Republic, unless the beneficial use of the property is, for consideration, transferred to a taxable person.

SEC. 234. Exemptions from Real Property Tax. The following are exempted from payment of the real property tax:(a) Real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person.This exemption, however, must be read in relation with Sec. 133(o) of the LGC, which prohibits LGUs from imposing taxes or fees of any kind on the national government, its agencies, and instrumentalities:SEC. 133. Common Limitations on the Taxing Powers of Local Government Units. Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following:x x x x(o) Taxes, fees or charges of any kinds on the National Government, its agencies and instrumentalities, and local government units. (Emphasis supplied.)Thus read together, the provisions allow the Republic to grant the beneficial use of its property to an agency or instrumentality of the national government. Such grant does not necessarily result in the loss of the tax exemption. The tax exemption the property of the Republic or its instrumentality carries ceases only if, as stated in Sec. 234(a) of the LGC of 1991, beneficial use thereof has been granted, for a consideration or otherwise, to a taxable person. GSIS, as a government instrumentality, is not a taxable juridical person under Sec. 133(o) of the LGC. GSIS, however, lost in a sense that status with respect to the Katigbak property when it contracted its beneficial use to MHC, doubtless a taxable person. Thus, the real estate tax assessment of PhP 54,826,599.37 covering 1992 to 2002 over the subject Katigbak property is valid insofar as said tax delinquency is concerned as assessed over said property.

Summary:In sum, the Court finds that GSIS enjoys under its charter full tax exemption. Moreover, as an instrumentality of the national government, it is itself not liable to pay real estate taxes assessed by the City of Manila against its Katigbak and Concepcion-Arroceros properties. Following the beneficial use rule, however, accrued real property taxes are due from the Katigbak property, leased as it is to a taxable entity. But the corresponding liability for the payment thereof devolves on the taxable beneficial user. The Katigbak property cannot in any event be subject of a public auction sale, notwithstanding its realty tax delinquency. This means that the City of Manila has to satisfy its tax claim by serving the accrued realty tax assessment on MHC, as the taxable beneficial user of the Katigbak property and, in case of nonpayment, through means other than the sale at public auction of the leased property.

5. TEAM PACIFIC CORPORATION VS. DAZA AS MUNICIPAL TREASURER OF TAGUIG, G.R. NO. 167732, JULY 11, 2012.Facts: Team Pacific Corp. (TPC) conducts its business at the FTI Complex in the then Mun. of Taguig. Since the start of its operations in 1999, TPC had been paying local taxes assessed at 1/2 rate pursuant to an Ordinance, o/w known as the Taguig Revenue Code.

When TPC renewed its license in 2004, however, tPCs business tax for the Q1 of the same year was assessed in P208,109.77 by Treas. Gaza computed by applying the full value of the rates provided under sec. 75 of the Taguig Revenue Code, instead of the 1/2 rate of the same provision. TPC filed a written protest with Daza, insisting on the 1/2 rate on which its business tax was previously assessed.

Subsequent to its demand for the round and/or issuance of a tax credit fro the sum of P104,054.88 which it considered as an overpayment of its business taxes for the same year, TPC filed petition for certiorari (rule 65). Alleging that no formal action was taken regarding its protest on or before Mar 19 2004 or within the period of 60 days from the filing thereof as prescribed under the LGC, TPC maintained that it was simply informed by the Chief of the Taguig Business Permit and Licensing Office, that the assessment of its business tax at the full rate was justified by the fact that it was not an exporter of the essential commodities enumerated under Sec. 143 of the LGC and sec. 75 of the Taguig Revenue Code (TRC). TPC prayed for the issuance of a TRO and/or permanent injunction to restrain the former from assessing business taxes at the full rate, the refund of tis overpayment as well as the grant of its claim for exemplary damages and attorneys fees.

Daza: that the change in the admin in the Mun. brought about the assessment and imposition of the correct business tax on TPC; that not being an exporter of the essential commodities, TPC is not entitled to the 50% business tax exemption it had been granted in the previous years. She likewise averred that TPC erred in filing its appeal in court within 30 days form receipt of the denial in accordance with art. 195 of the LGC. She prayed for the dismissal of the petition for certiorari on the ground that the same cannot be resorted to as substitute for a lost right of appeal and was, by itself, bereft of merit.

TPC: Daza failed to act formally on it s letter-protest and took the latter to task for not attaching to her comment a copy of the supposed denial

RTC: dismissed the petition for lack of merit that while finding that the absence of the denial of the protest meant that the TPC had 3 0days from the lapse of 60 days prescribed under Art. 195 of the LGC within which to perfect its appeal, rather than the special civil action of certiorari provided by the rules of court, an ordinary appeal would have been the proper remedy from the assessment complained against.

Issue:Whether or not TPC availed the proper remedy of appealing the assailed RTC decision.

Ruling:Yes. Considering that the RTCs assailed 5 April 2005 order did not delve on the proper rate of business tax imposable on TPC as an exporter, we shall limit our discussion to the procedural aspects of the petition.A taxpayer dissatisfied with a local treasurers denial of or inaction on his protest over an assessment has thirty (30) days within which to appeal to the court of competent jurisdiction. Under the law, said period is to be reckoned from the taxpayers receipt of the denial of his protest or the lapse of the sixty (60) day period within which the local treasurer is required to decide the protest, from the moment of its filing. This much is clear from Section 195 of the Local Government Code which provides as follows:SEC. 195. Protest of Assessment. - When the local treasurer or his duly authorized 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 shall become 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. The taxpayer 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.Absent any showing of the formal denial of the protest by Atty. Miranda, then Chief of the Taguig Business Permit and Licensing Office, we find that TPCs filing of its petition before the RTC on 19 April 2004 still timely. Reckoned from the filing of the letter protest on 19 January 2004, Daza had sixty (60) days or until 19 March 2004 within which to resolve the same in view of the fact that 2004 was a leap year. From the lapse of said period, TPC, in turn, had thirty (30) days or until 18 March 2004 within which to file its appeal to the RTC. Since the latter date fell on a Sunday, the RTC correctly ruled that TPCs filing of its petition on 19 April 2004 was still within the period prescribed under the above quoted provision. Whether or not a Rule 65 petition for certiorari was the appropriate remedy from Dazas inaction on TPCs letter-protest is, however, an entirely different issue which we are now called upon to resolve, considering the RTCs ruling that it should have filed an ordinary appeal instead. As correctly observed by TPC, after all, Section 195 of the Local Government Code does not elaborate on how an appeal is to be made from the denial by a local treasurer of a protest on assessment made by a taxpayer.

The foregoing pronouncements notwithstanding, we find that TPC erroneously availed of the wrong remedy in filing a Rule 65 petition for certiorari to question Dazas inaction on its letter-protest. The rule is settled that, as a special civil action, certiorari is available only if the following essential requisites concur: (1) it must be directed against a tribunal, board, or officer exercising judicial or quasi-judicial functions; (2) the tribunal, board, or officer must have acted without or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction; and, (3) there is no appeal nor any plain, speedy, and adequate remedy in the ordinary course of law.17 Judicial function entails the power to determine what the law is and what the legal rights of the parties are, and then undertakes to determine these questions and adjudicate upon the rights of the parties. Quasi-judicial function, on the other hand, refers to the action and discretion of public administrative officers or bodies, which are required to investigate facts or ascertain the existence of facts, hold hearings, and draw conclusions from them as a basis for their official action and to exercise discretion of a judicial nature.18

Gauged from the foregoing definitions, Daza cannot be said to be performing a judicial or quasi-judicial function in assessing TPCs business tax and/or effectively denying its protest as then Municipal Treasurer of Taguig. For this reason, Dazas actions are not the proper subjects of a Rule 65 petition for certiorari which is the appropriate remedy in cases where a the tribunal, board, or officer exercising judicial or quasi-judicial functions acted without or in grave abuse of discretion amounting to lack or excess of jurisdiction and there is no appeal or any plain, speedy, and adequate remedy in law.19 Narrow in scope and inflexible in character,20 certiorari is an extraordinary remedy designed for the correction of errors of jurisdiction and not errors of judgment.21 It is likewise considered mutually exclusive with appeal22 like the one provided by Article 195 of the Local Government Code for a local treasurers denial of or inaction on a protest.

Even if, in the interest of substantial justice, we were to consider its petition for certiorari as an appeal from Dazas denial of its protest, TPCs availment of the wrong mode of appeal from the RTCs assailed 5 April 2005 Order has, moreover, clearly rendered the same final and executory. Granted that a Rule 45 petition for review on certiorari is the proper mode of appeal when the issues raised are purely questions of law,23 TPC lost sight of the fact that, as amended by RA No. 9282,24 paragraph c (2) [a], Section 725 of RA No. 112526 has vested the Court of Tax Appeals (CTA) with the exclusive appellate jurisdiction over, among others, appeals from the judgments, resolutions or orders of the RTC in tax collection cases originally decided by them in their respective territorial jurisdiction. As amended by Section 9 of RA No. 9282,27 Section 11 of RA No. 1125 likewise requires that the appeal be perfected within thirty (30) days after receipt of the decision and shall be made by filing a petition for review under a procedure analogous to that provided for under Rule 42 of the 1997 Rules of Civil Procedure.

To our mind, TPCs erroneous availment of the wrong mode of appeal and direct resort to this Court instead of the CTA both warrant the dismissal of the petition at bench. The rule is settled that the perfection of an appeal in the manner and within the period fixed by law is not only mandatory but jurisdictional and non-compliance with these legal requirements is fatal to a partys cause.

6. REPUBLIC OF THE PHILIPPINES REPRESENTED BY THE PHILIPPINE RECLAMATION AUTHORITY VS. CITY OF PARANAQUE, G.R. NO. 191109, JULY 18, 2012.

7. (GR No.166838, 2011) STA. LUCIA REALTY & DEVELOPMENT, INC.,petitioner,vs. CITY OF PASIG,respondent, MUNICIPALITY OF CAINTA, PROVINCE OF RIZAL,intervenorComment by Aimee Karina Cebrecus : Madel

Facts: Sta. Lucia Realty & Development, Inc. is the registered owner of several parcels of land with TCT Nos. 39112, 39110 and 38457, all of which indicated that the lots were located inBarrio Tatlong Kawayan, Municipality of Pasig.The parcel of land covered by TCT No. 39112 was consolidated with that covered by TCT No. 518403, which was situated inBarrio Tatlong Kawayan, Municipality of Cainta. The two combined lots were subsequently partitioned into three, for which TCT Nos. 532250, 598424, and 599131, now all bearing the Cainta address, were issued.TCT No. 39110 was also divided into two lots, becoming TCT Nos. 92869 and 92870.The lot covered by TCT No. 38457 was not segregated, but a commercial building owned by Sta. Lucia East Commercial Center, Inc., a separate corporation, was built on it.Upon Pasig's petition to correct the location stated in TCT Nos. 532250, 598424, and 599131, the Land Registration Court ordered the amendment of the TCTs to read that the lots with respect to TCT No. 39112 were located in Pasig City.Cainta filed a petitionfor the settlement of its land boundary dispute with Pasig before the RTC Antipolo. This case is still pending to date.Pasig: Filed a Complaint against Sta. Lucia with RTC Pasig for the collection of real estate taxes, including penalties and interests, on the lots covered by TCT Nos. 532250, 598424, 599131, 92869, 92870 and 38457, including the improvements thereon.Sta. Lucia: It had been religiously paying its real estate taxes to Cainta, just like what its predecessors-in-interest did since 1913, by virtue of the demands and assessments made and the Tax Declarations issued by Cainta.Cainta: In its Answer-in-Intervention said it had been collecting the real property taxes on the subject properties even before Sta. Lucia acquired them. The establishment of the boundary monuments would show that the subject properties are within its metes and bounds.Sta. Lucia and Cainta: M