8/31/2016 G.R.No.

PHILIPPINEJURISPRUDENCEFULLTEXT
TheLawphilProjectArellanoLawFoundation
G.R.No.100959June29,1992
BENGUETCORP.vs.CENTRALBOARDOFASSESSMENTAPPEALS

RepublicofthePhilippines
SUPREMECOURT
Manila

FIRSTDIVISION

G.R.No.100959June29,1992

BENGUETCORPORATION,petitioner,

vs.

CENTRAL BOARD OF ASSESSMENT APPEALS, LOCAL BOARD OF ASSESSMENT APPEALS OF THE PROVINCE OF
BENGUET,andMUNCIPALASSESSOROFITOGON,BENGUET,respondents.

BELLOSILLO,J.:

BENGUETCORPORATION,inthisoriginalpetitionforcertiorari,seekstoannulandsetasidetheDecisionoftheCentralBoardof
AssessmentAppealsofMay28,1991,aswellastheResolutionofJuly1,1991,denyingitsmotionforreconsideration,whichaffirmed
thedecisionofrespondentLocalBoardofAssessmentAppealsoftheProvinceofBenguetdeclaringasvalidthetaxassessments
made by the Municipal Assessor of Itogon, Benguet, on the bunkhouses of petitioner occupied as dwelling by its rank and file
employeesbasedonTaxDeclarationsNos.8471and10454.

The Provincial Assessor of Benguet, through the Municipal Assessor of Itogon, assessed real property tax on the bunkhouses of
petitionerBenguetCorporationoccupiedforresidentialpurposesbyitsrankandfileemployeesunderTaxDeclarationsNos.8471
(effective1985)and10454(effective1986).AccordingtotheProvincialAssessor,thetaxexemptionofbunkhousesunderSec.3(a),
P.D.745(LiberalizingtheFinancingandCreditTermsforLowCostHousingProjectsofDomesticCorporationsandPartnerships),was
withdrawn by P.D. 1955 (Withdrawing, Subject to Certain Conditions, the Duty and Tax Privileges Granted to Private Business
Enterprises and/or Persons Engaged in Any Economic Activity, and Other Purposes). Petitioner appealed the assessment on Tax
DeclarationsNos.8471and10454totheLocalBoardofAssessmentAppeals(LBAA)oftheProvinceofBenguet,docketedasLBAA
CasesNos.42and43,respectively.Bothwereheardjointly.

Meanwhile,thepartiesagreedtosuspendhearingsinLBAACasesNos.42and43toawaittheoutcomeofanothercase,LBAACase
No.41,coveringTaxDeclarationNo.9534(effective1984),whichinvolvedthesamepartiesandissueuntiltheappealwasdecided
by the Central Board of Assessment Appeals (CBAA). On July 15, 1986, CBAA handed down its decision in LBAA Case No. 41
holdingthatthebuildingsofpetitionerusedasdwellingsbyitsrankandfileemployeeswereexemptfromrealpropertytaxpursuant
toP.D.745.

Thereafter,theproceedingsinLBAACasesNos.42and43proceededafterwhichadecisionwasrenderedaffirmingthetaxabilityof
subject property of petitioner. On appeal, CBAA sustained the decision holding that the realty tax exemption under P.D. 745 was
withdrawnbyP.D.1955andE.O.93,sothatpetitionershouldhaveappliedforrestorationoftheexemptionwiththeFiscalIncentives
ReviewBoard(FIRB).ThedecisionofCBAAclarifiedthatCaseNo.41wasdifferentbecauseitwaseffectivepriorto1985,hence,
wasnotcoveredbyP.D.1955norbyE.O.93.

Petitioner moved for reconsideration but was denied with CBAA holding that petitioner's "classification" of P.D. 745 is unavailing
becauseP.D.1955andE.O.93donotdiscriminateagainstthesocalled"socialstatutes".Hence,thispetition.

Encapsulized, the issues raised in the petition are:(1) whether respondent Assessors may validly assess real property tax on the
properties of petitioner considering the proscription in The Local Tax Code (P.D. 231) and the Mineral Resources Development
Degreeof1974(P.D.463)againstimpositionoftaxesonminesbylocalgovernmentsand,(2)whethertherealtaxexemptiongranted
underP.D.745(promulgatedJuly15,1975)waswithdrawnbyP.D.1955(tookeffectOctober15,1984)andE.O.93.

PresidentialDecreeNo.745,particularlySec.3thereof,provides:

Sec.3.Pursuanttotheaboveincentive,suchdomesticcorporationsandpartnershipsshallenjoytaxexemptionon:(a)
realestatetaxesontheimprovementswhichwillbeusedexclusivelyforhousingtheiremployeesandworkers...

PresidentialDecreeNo.1955,Sec.1,provides:

Sec. 1. The provisions of any special or general law to the contrary notwithstanding, all exemptions from or any
preferentialtreatmentinthepaymentofduties,taxes,fees,impostsandotherchargesheretoforegrantedtoprivate
businessenterprisesand/orpersonsengagedinanyeconomicactivityareherebywithdrawn.exceptthoseenjoyedby
thefollowing:...(e)ThosethatwillbeapprovedbythePresidentofthePhilippinesupontherecommendationofthe
MinisterofFinance,

shouldbereadinconnectionwithMinistryOrderNo.3984,Sec.1(d),ofthethenMinistryofFinance,whichtookeffectOctober15,
1984,states:

Sec.1.Thewithdrawalofexemptionsfrom,oranypreferentialtreatmentin,thepaymentofduties,taxes,fees,imposts
andotherchargesasprovidedforunderPresidentialDecreeNo.1955,doesnotapplytoexemptionsorpreferential
treatmentembodiedinthefollowinglaws:...(d)TheRealPropertyTaxCode...

Executive Order No. 93, promulgated December 17, 1986, is also to the same effect. Both P.D. 1955 and E.O. 93 operate as
wholesalewithdrawaloftaxincentivesgrantedtoprivateentitiessothatthegovernmentmayreexamineexistingtaxexemptionsand
restorethroughthe"reviewmechanism"oftheFiscalIncentivesReviewBoardonlythosethatareconsistentwithdeclaredeconomic
policy.Thuswise,thechiefrevenuesourceofthegovernmentwillnotbegreatly,ifnotunnecessarily,erodedsincetaxexemptionsthat
weregrantedonpiecemealbasis,andwhichhavelostrelevancetoexistingprograms,areeliminated.

Onthefirstissue,petitionercontendsthatlocalgovernmentunitsarewithoutanyauthoritytolevyrealtytaxesonminespursuantto
Sec.52ofP.D.463,whichstates:

Sec. 52. Power to Levy Taxes on Mines, Mining Operations and Mineral Products. Any law to the contrary
notwithstanding, no province, city, municipality, barrio or municipal district shall levy and collect taxes, fees, rentals,
royaltiesorchargesofanykindwhatsoeveronmines,miningclaims,mineralproducts,oranyoperation,processor
activityconnectedtherewith,
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andSec.5(m)ofTheLocalTaxCode,asamendedbyP.D.426(reiteratedinSecs.17[d]and22[c],sameCode),whichprovides:

Sec. 5. Common limitations on the taxing powers of local governments. The exercise of the taxing powers of
provinces,cities,municipalitiesandbarriosshallnotextendtotheimpositionofthefollowing:...(m)Taxesonmines
miningoperationsandminerals,mineralproducts,andtheirbyproductswhensolddomesticallybytheoperator...

TheSolicitorGeneralobservesthatthepetitionerisestoppedfromraisingthequestionoflackofauthoritytoissuethechallenged
assessmentsinasmuchasitwasneverraisedbefore,hence,notpasseduponby,themunicipalandprovincialassessors,LBAAand
CBAA.Thisobservationiswelltaken.Therulethattheissueofjurisdictionoversubjectmattermayberaisedanytime,evenduring
appeal,hasbeenqualifiedwhereitsapplicationresultsinmockeryofthetenetsoffairplay,asinthiscasewhentheissuecouldhave
beendisposedofearlierandmoreauthoritativelybyanyoftherespondentswhoaresupposedtobeexpertsinthefieldofrealtytax
assessment.AsWeheldinSuarezv.CourtofAppeals1:

...Itissettledthatanydecisionrenderedwithoutjurisdictionisatotalnullityandmaybestruckdownatanytime,even
onappealbeforethisCourt.Theonlyexceptioniswherethepartyraisingtheissueisbarredbyestoppel(Tijamvs.
Sibonghanoy,23SCRA29,reiteratedinSolidHomes,Inc.vs.PayawalandCourtofAppeals,G.R.No.84811,August
29,1989emphasissupplied).

Whilepetitionercouldhavepreventedthetrialcourtfromexercisingjurisdictionoverthecasebyseasonablytaking
exception thereto, they instead invoked the very same jurisdiction by filing an answer and seeking affirmative relief
from it. What is more, they participated in the trial of the case by crossexamining respondent. Upon the premises,
petitionercannotnowbeallowedbelatedlytoadoptaninconsistentposturebyattackingthejurisdictionofthecourtto
whichtheyhadsubmittedthemselvesvoluntarily(Tijamvs.Sibonghanoy,supra).

InAguinaldoIndustriesCorporationv.CommissionerofInternalRevenueandtheCourtofTaxofAppeals,2Weheld:

Toallowalitiganttoassumeadifferentposturewhenhecomesbeforethecourtandchallengethepositionhehad
accepted at the administrative level, would be to sanction a procedure whereby the court which is supposed to
reviewadministrativedeterminationswouldnotreview,butdetermineanddecideforthefirsttime,aquestionnot
raisedattheadministrativeforum.Thiscannotbepermitted,forthesamereasonthatunderliestherequirementofprior
exhaustionofadministrativeremediestogiveadministrativeauthoritiestheprioropportunitytodecidecontroversies
withinitscompetence,andinmuchthesamewaythat,anthejudiciallevel,issuesnotraisedinthelowercourtcannot
beraisedforthefirsttimeonappeal.

Besides,thespecialcivilactionofcertiorariisavailabletopassuponthedeterminationsofadministrativebodieswherepatentdenial
ofdueprocessisallegedasaconsequenceofgraveabuseofdiscretionorlackofjurisdiction,orquestionoflawisraisedandno
appealisavailable.Inthiscase,petitionermaynotcomplainofdenialofdueprocesssinceithadenoughopportunity,butoptednot,
toraisetheissueofjurisdictioninanyoftheadministrativebodiestowhichthecasemayhavebeenbrought.

Petitionerarguesthatrealtytaxesarelocaltaxesbecausetheyareleviedbylocalgovernmentunits,citingSec.39ofP.D.464,which
provides:

Sec.39.RatesofLevy.Theprovincial,cityormunicipalboardorcouncilshallfixauniformrateofrealpropertytax
applicabletotheirrespectivelocalities...

Whilelocalgovernmentunitsarechargedwithfixingtherateofrealpropertytaxes,itdoesnotnecessarilyfollowfromthatauthority
thedeterminationofwhetherornottoimposethetax.Infact,localgovernmentshavenoalternativebuttocollecttaxesasmandated
inSec.38oftheRealPropertyTaxCode,whichstates:

Sec.38IncidenceofRealPropertyTax.Thereshallbelevied,assessedandcollectedinallprovinces,citiesand
municipalitiesanannualadvaloremtaxonrealproperty,suchasland,buildings,machineryandotherimprovements
affixedorattachedtorealpropertynothereinafterspecificallyexempted.

Itisthusclearfromtheforegoingthatitisthenationalgovernment,expressingitselfthroughthelegislativebranch,thatleviesthereal
propertytax.Consequently,whenlocalgovernmentsarerequiredtofixtherates,theyaremerelyconstitutedasagentsofthenational
governmentintheenforcementoftheRealPropertyTaxCode.Thedelegationoftaxingpowerisnoteveninvolvedherebecausethe
national government has already imposed realty tax in Sec. 38 abovequoted, leaving only the enforcement to be done by local
governments.

The challenge of petitioner against the applicability of Meralco Securities Industrial Corporation v. Central Board of Assessment
Appeals,etal.,3isunavailing,absentanycogentreasontooverturnthesame.Thus

MeralcoSecuritiesarguesthattherealtytaxisalocaltaxorlevyandnotataxofgeneralapplication.Thisargumentis
untenablebecausetherealtytaxhasalwaysbeenimposedbythelawmakingbodyandlaterbythePresidentofthe
Philippinesintheexerciseofhislawmakingpowers,asshowninSections342etseq.oftheRevisedAdministrative
Code,ActNo.3995,CommonwealthActNo.470andPresidentialDecreeNo.464.

TherealtytaxisenforcedthroughoutthePhilippinesandnotmerelyinaparticularmunicipalityorcitybuttheproceeds
ofthetaxaccruetotheprovince,city,municipalityandbarriowheretherealtytaxedissituated(Sec.86,P.D.No.464).
Incontrast,alocaltaxisimposedbythemunicipalorcitycouncilbyvirtueoftheLocalTaxCode,PresidentialDecree
No.231,whichtookeffectonJuly1,1973(69O.G.6197).

Consequently,theprovisionsofSec.52oftheMineralResourcesDevelopmentDecreeof1974(P.D.463),andSecs.5(m),17(d)
and22(c)ofTheLocalTaxCode(P.D.231)citedbypetitioneraremerelimitationsonthetaxingpoweroflocalgovernmentunits
theyarenotpertinenttotheissuebeforeUsand,therefore,cannotandshouldnotaffecttheimpositionofrealpropertytaxbythe
nationalgovernment.

Asregardsthesecondissue,petitioner,whichclaimsthatE.O.93doesnotrepealsocialstatuteslikeP.D.745,inthesamebreath
takesrefugeinSec.1(e)ofthesameE.O.93,towit:

Sec.1.Theprovisionsofanygeneralorspeciallawtothecontrarynotwithstanding,alltaxanddutyincentivesgranted
togovernmentandprivateentitiesareherebywithdrawnexcept:...(e)thoseconferredunderthefourbasiccodes,
namely:...(iv)theRealPropertyTaxCode,asamended...

inrelationtoSec.40oftheRealPropertyTaxCode,whichprovides:

Sec.40.ExemptionsfromRealPropertyTax.Theexemptionshallbeasfollows:...(g)Realpropertyexemptunder
otherlaws.

andconcludingthatP.D.745isoneofthe"otherlaws"referredto.

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Wedonotagree.IfWearetosanctionthisinterpretation,thennecessarilyallrealpropertiesexemptbyanylawwouldbecovered,
andtherewouldbenoneedforthelegislaturetospecify"RealPropertyTaxCode,asamended",insteadofstatingclearly"realtytax
exemption laws''. Indubitably, the intention is to limit the application of the "exception clause" only to those conferred by the Real
Property Tax Code. This is not only a logical construction of the provisions but more so in keeping with the principle of statutory
constructionthattaxexemptionsareconstruedstrictlyagainsttaxpayers,hence,theycannotbecreatedbymereimplicationbutmust
beclearlyprovidedbylaw.Nonexemption,incaseofdoubt,isfavored.

Quiteobviously,theexceptioninSec.1(e),(iv),ofE.O.93,refersto"thoseconferredunder...RealPropertyTaxCase,asamended,
andthattheexemptionclaimedbypetitionerisgrantednotbytheRealPropertyTaxCodebutbyP.D.745.WhenSec.40(g)ofthe
PropertyTaxCodeprovidesthat"[T]heexemptionshallbeasfollows:...RealPropertyexemptunderotherlaws",theCodemerely
recognizesrealtytaxexemptionsprovidedbyotherlaws,otherwise,itmayunwittinglyrepealthose"otherlaws"

TheargumentofpetitionerthatP.D.745isasocialstatutetogivefleshtotheConstitutionalprovisionsonhousing,hence,notcovered
byP.D.1955,wassquarelymetbyrespondentCBAAinitsResolutionofJuly1,1991,towhichWefullyagree

Thephrase"anyspecialorgenerallaw"explicitlyindicatesthatP.D.No.1955didnotdistinguishbetweenasocial
statuteandaneconomicortaxlegislation.Hence,wherethelawdoesnotdistinguish,wecannotdistinguish.Inview
thereof,wehavenorecoursebuttoapplytheexpressprovisionofP.D.No.1955andruleinfavorofthewithdrawalof
therealpropertytaxexemptionprovidedunderP.D.No.745.WealsofindwithoutmeritthecontentionofPetitioner
AppellantthatB.P.No.391(InvestmentIncentivesPolicyActof1983)isthesourceandreasonfortheexistenceofP.D.
No.1955therefore,thescopeofP.D.No.1955islimitedtoinvestmentincentives.AlthoughSection20ofsaidB.P.
whichauthorizesthePresidenttorestructureinvestmentincentivessystems/legislationstoalignthemwiththeoverall
economicdevelopmentobjectivesisoneofthedeclaredpoliciesofP.D.No.1955,itsprimaryaimistheformulationof
national recovery program to meet and overcome the grave emergency arising from the current economic crisis.
Hence,itcannotbemaintainedthatitsprovisionsapplyonlytoinvestmentincentives.

Besides,evengrantingthatitsscopeislimited,itisnotedthatP.D.No.745alsospeaksofinvestmentincentivesin
Section2and3thereof...

Infine,despitethespiritedeffortputupbypetitioner,Wefindnocompellingreasontodisturbthefindingsandconclusionofpublic
respondents.Petitioner,whichevenchangedtheoriesmidstream,utterlyfailedtoshowthatrespondents,inissuingthechallenged
DecisionandResolution,committedgraveabuseofdiscretionamountingtolackoforexcessofjurisdiction.

WHEREFORE,forlackofmerit,theinstantpetitionisdismissed,withcostsagainstpetitioner.

SOORDERED.

Cruz,GrioAquinoandMedialdea,JJ.,concur.

Footnotes

1G.R.No.80199,June6,1990186SCRA339.

2L29790,February25,1982112SCRA136.

3199Phil.453G.R.No.L46245,May31,1982.

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