Light Rail Transit Authority v. City of Pasay, G.R. No. 211299, (June 28, 2022)
Light Rail Transit Authority v. City of Pasay, G.R. No. 211299, (June 28, 2022)
Light Rail Transit Authority v. City of Pasay, G.R. No. 211299, (June 28, 2022)
DECISION
HERNANDO, J : p
Before this Court is a Petition 1 under Rule 45 of the Rules of Court, seeking
to set aside the October 8, 2013 Decision 2 and the January 29, 2014 Resolution 3 of
the Court of Appeals (CA) CA-G.R. SP No. 129922.
From 1985 to 2001, the City of Pasay (City) assessed the Light Rail Transit
Authority (LRTA) of real estate taxes on its properties consisting of lands, buildings,
machineries, carriageways, and passenger terminal stations. LRTA admitted its tax
liabilities and proposed to pay them on installment basis. It even requested for
condonation of penalties on its arrears. 4
Accordingly, and for reasons above discussed, the said [P]etition for
Certiorari, Prohibition and Mandamus under Rule 65 of the Rules of Civil
Procedure is ordered as it is hereby ordered DISMISSED.
SO ORDERED. 11
The Court believes otherwise. The pending incident has long been
existing since 1985 to 2003, and to claim that there is no appeal or any other
plain, speedy and adequate remedy in the course of law is an admission of
lapses and/or estoppel on the part of the movant.
SO ORDERED. 14
On October 8, 2013, the CA denied 16 the appeal of LRTA and affirmed the
RTC ruling in toto, finding that LRTA has not exhausted all administrative remedies,
and that it should not be extended a similar tax exemption accorded to the Manila
International Airport Authority (MIAA) in the 2006 MIAA Case. The CA held
that LRTA was already found to be a taxable entity pursuant to the case of LRTA v.
Central Board of Assessment Appeals (2000 LRTA Case). 17
SO ORDERED. 18
Issues
Unperturbed, LRTA filed the instant petition with this Court, alleging the
following assignment of errors:
1) The CA erred in ruling that LRTA failed to exhaust administrative
remedies before properly resorting to the Courts.
Our Ruling
An opportunity to clarify the effects of our ruling in the 2006 MIAA Case to
previous rulings involving similar issues and similarly situated entities presents itself
to this Court. The 2006 MIAA Case is significant as it explained and delineated the
difference between government instrumentalities from government-owned and
controlled corporations (GOCCs), particularly with regard to how their respective
real properties are treated for local real property tax purposes.
At the outset, however, We must first rule on the procedural aspects of this
case.
Exhaustion of Administrative
Remedies
Both the RTC and the CA dismissed LRTA's petition on the ground that the
latter failed to exhaust all administrative remedies before resorting to the courts. The
RTC and the CA were in unison in holding that the case of Ty being relied upon by
LRTA, does not apply in the instant case since the latter was questioning the
assessments themselves and not the authority of the city assessor to collect taxes. The
CA, in particular, ruled as follows:
On the other hand, LRTA, in its petition to this Court, argues that the rule
on exhaustion of administrative remedies must be set aside in light of our ruling in
Ty. In particular, LRTA asserts that the instant petition raises primarily questions of
law, and thus, the same falls under the exception to the general rule, to wit:
In the instant case, LRTA is questioning the very authority of the herein
respondents to impose and collect real property tax on the properties registered in its
name. It never questioned the assessments made by the city assessor or the amounts
being collected by the city treasurer. A reading of its original petition would readily
show that LRTA, while claiming to be a government instrumentality instead of a
government-owned or controlled corporation (GOCC), is questioning the power of
the assessor to assess, and the authority of the treasurer to collect, taxes against it. 24
Jurisprudence would reveal that the Court has set aside such rule: (1) when
there is a violation of due process, (2) when the issue involved is purely a legal
question, (3) when the administrative action is patently illegal amounting to lack or
excess of jurisdiction, (4) when there is estoppel on the part of the administrative
agency concerned, (5) when there is irreparable injury, (6) when the respondent is a
department secretary whose acts as an alter ego of the President bears the implied
and assumed approval of the latter, (7) when to require exhaustion of administrative
remedies would be unreasonable, (8) when it would amount to a nullification of a
claim, (9) when the subject matter is a private land in land case proceedings, (10)
when the rule does not provide a plain, speedy and adequate remedy, and (11)
when there are circumstances indicating the urgency of judicial intervention. 26
From the records, it can be clearly seen that the circumstances of the instant
case necessitate that We set aside the general rule.
The issues involved in this petition are purely legal issues. It is evident that
from the outset, LRTA primarily intended to question the authority of the tax
assessor to impose tax assessments on its property, and the authority of the treasurer
to collect said tax, as LRTA claims to be a non-taxable entity. This can be seen when
the LRTA deliberately chose to file the remedies of certiorari, prohibition and
mandamus, instead of just filing a protest to contest the amounts in the assessment.
Rule 65 of the Rules of Court provides:
RULE 65
remedy
Moreover, there are no competent administrative tribunals that may grant the
relief that LRTA is seeking. The questions of law interposed in this instant petition
may only be appropriately addressed by the courts, and are the proper subjects of a
petition for prohibition under Rule 65.
In the contrast with Napocor, the LRTA, in filing a Petition for Certiorari,
Prohibition and Mandamus with the RTC at the earliest instance, clearly intended
to question the local assessor's authority to assess real property taxes on its property
and the local treasurer's authority to collect such taxes. The LRTA never invoked
Section 206 of the LGC, or even bother to file a protest under Section 252, as the
LRTA is not merely claiming tax-exemption on some or all of its properties (which
admits the local assessor's authority to assess), but it has been arguing since the
beginning that both the city assessor and treasurer do not have the authority to assess
and collect local real property tax on its properties, which is similar to what was
being claimed in Ty.
The provisions of Sections 226 and 229 of RA 7160, being material to this
issue, are set forth below:
(a) The Board shall decide the appeal within one hundred twenty
(120) days from the date of receipt of such appeal. The Board, after hearing,
shall render its decision based on substantial evidence or such relevant
evidence on record as a reasonable mind might accept as adequate to support
the conclusion.
(b) In the exercise of its appellate jurisdiction, the Board shall have
the power to summon witnesses, administer oaths, conduct ocular
inspection, take depositions, and issue subpoena and subpoena duces tecum.
The proceedings of the Board shall be conducted solely for the
purpose of ascertaining the facts without necessarily adhering to
technical rules applicable in judicial proceedings.
(c) The secretary of the Board shall furnish the owner of the property
or the person having legal interest therein and the provincial or city assessor
with a copy of the decision of the Board. In case the provincial or city
assessor concurs in the revision or the assessment, it shall be his duty to
notify the owner of the property or the person having legal interest therein
of such fact using the form prescribed for the purpose. The owner of the
property or the person having legal interest therein or the assessor who is not
satisfied with the decision of the Board, may, within thirty (30) days after
receipt of the decision of said Board, appeal to the Central Board of
Assessment Appeals, as herein provided. The decision of the Central Board
shall be final and executory. (Emphasis supplied)
Verily, the protest provided for in the above is not an adequate remedy, as such
protest is limited to questioning the assessment itself, and not the authority
of the assessor. Furthermore, it is clear from the above-quoted provisions that
proceedings before the Local Board of Assessment Appeals (LBAA) is limited to
fact-finding, and there is no indicia under the law that the LBAA has jurisdiction to
rule upon the legal issue interposed in the present controversy. It must be
emphasized that LRTA is not just "unsatisfied" with the assessments against it, nor is
it merely claiming tax exemption on some or all of its properties. Rather, LRTA is
questioning, among others, the authority itself of the city assessor to assess its
properties for real property tax purposes, given the former's alleged status as a
government instrumentality.
The CA was therefore remiss in ruling that the petition entails the
examination of facts, as it is evident that the question on the authority/power of the
City to levy and collect real property taxes on certain properties of LRTA, in relation
to LRTA's legal classification, are clearly legal questions, that only the courts have the
competency and jurisdiction to resolve.
Given the foregoing, We find the application of our ruling in Ty to the instant
case to be appropriate, and hence, give due course to the petition.
With respect to the substantive portion of the controversy, the Court finds
the instant petition to be meritorious.
In dismissing LRTA's petition, the RTC adopted the City's position and
relied upon our ruling in the 2000 LRTA Case. On appeal, the CA maintained a
similar posture with the RTC, ruling as follows:
On the other hand, LRTA argued that the 2000 LRTA Case, while involving
the same parties, do not involve the same issues as new facts or conditions have
intervened before the second suit, furnishing a new basis for its claim and defenses.
Hence, the former judgment cannot be pleaded as a bar to the subsequent action. 33
The intervening facts or conditions were not specified in the body of the
instant petition, however, it can be easily inferred from the facts that the 2006
MIAA Case, which was cited by LRTA repeatedly, to be the supervening basis that it
is referring to.
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. The decision became final
and executory on November 3, 2006. 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. 36
It was only in 2018 when this Court would have the opportunity to squarely
rule on the classification of petitioner LRTA in the wake of the doctrine laid down in
the 2006 MIAA Case. In the case of Light Rail Transit Authority vs. City of Manila,
represented by the City Treasurer and the City Assessor (2018 LRTA Case), 38 LRTA
filed a Petition for Certiorari and Mandamus against the City of Manila, which was
poised to sell off petitioner's properties to answer for its delinquent real property tax
notwithstanding its assertion that it was a government instrumentality exempt
therefrom given the standards laid down in 2006 MIAA Case. The lower courts
dismissed the petition, hence, LRTA elevated the matter before this Court. In a
Minute Resolution, this Court adjudged that LRTA's liability for real property tax
was already settled in the 2000 LRTA Case. In so doing, this Court apparently found
the 2006 MIAA Case doctrine inapplicable and declared that the 2000 LRTA Case
was authoritative with respect to petitioner's classification and resulting taxability.
However, about a year later, in Light Rail Transit Authority v. Quezon City
(2019 LRTA Case), 39 this Court in Division essentially ruled in the opposite,
declaring that the 2000 LRTA Case needed to be re-examined in light of the 2006
MIAA Case, and the "present-day social milieu of great public impact."
Emphatically, the Court held that the reasoning which formed the basis for the
decision in the 2000 LRTA Case "no longer holds water." The Court concluded that
petitioner satisfied the requisites to be considered a government instrumentality
exercising corporate powers, which was exempt from real property tax.
Given this glaring conflict between the 2018 LRTA Case and 2019 LRTA
Case, primarily on how these cases view the effect of the 2006 MIAA Case to the
2000 LRTA Case, the Court is behooved by its constitutional mandate as the final
arbiter of the law to resolve the issue once and for all.
Pertinently, while the 2019 LRTA Case correctly held that the standards laid
down in the 2006 MIAA Case to be applicable to LRTA, the said 2006 MIAA Case
does not specifically pertain to LRTA. To add to the confusion, there was already a
prior case — the 2000 LRTA Case — where the same issue on petitioner's liability
for real property was squarely raised and tackled by the Court. To date, there is no
En Banc case which expressly overturned the pronouncement in the 2000 LRTA
Case.
Moreover, the doctrine of stare decisis demands that the Court adhere to
precedent once it lays down a principle of law as applicable to a certain state of facts
and "apply it to all future cases, where facts are substantially the same; regardless of
whether the parties and property are the same." 41 The doctrine rests on sound
public policy to secure certainty and stability of judicial decisions. 42 As a result, only
a strong or compelling reason can operate to impel the Court to abandon a prior
ruling. 43
This Court finds such a reason exists in this case given the revolutionary
principles espoused by the 2006 MIAA Case. In fact, due to these principles, other
similarly situated entities were subsequently re-classified as government
instrumentalities exercising corporate powers, such as the Mactan-Cebu
International Airport Authority, 44 and the Bases Conversion and Development
Authority, 45 despite earlier rulings to the contrary.
In a similar vein, it must be reiterated that, regardless of earlier rulings, the
prevailing doctrine with regard to the legal classification of government corporate
entities (as either government instrumentalities or GOCCs), are the standards laid
down in the 2006 MIAA Case. Thus, the 2000 LRTA Case, which was decided by a
Division, should be reexamined by this Court sitting en banc, in light of the
significant legal developments ushered in by the 2006 MIAA Case, which was also
decided En Banc.
LRTA is a government
among others
In the 2006 MIAA Case, this Court discussed the definition of a government
instrumentality and a GOCC with regard to the Administrative Code of 1987
(Administrative Code). Section 2 (10) of the Introductory Provisions of the
Administrative Code defines an "instrumentality" as follows:
The fact that two terms have separate definitions means that while a
government "instrumentality" may include a "GOCC," there may be a government
"instrumentality" that will not qualify as a "GOCC." 47
A close scrutiny of the definition of "GOCC" in Section 2 (13) will show that
LRTA would not fall under such definition. LRTA is a government
"instrumentality" that does not qualify as a "GOCC." As explained in the 2006
MIAA Case:
A cursory perusal of the LRTA charter would reveal that it was not organized
as a stock corporation because it has no capital stock divided into shares. In fact, the
LRTA has no stockholders or voting shares. Article 6, Section 15 of Executive Order
No. (EO) 603 49 or the LRTA Charter which created the LRTA, provides:
Moreover, the same LRTA charter would reveal that the LRTA has no
members. Section 87 of the Corporation Code defines a non-stock corporation as
"one where no part of its income is distributable as dividends to its members, trustees
or officers." This implies that a non-stock corporation must have members, which
the LRTA does not have.
Since the LRTA is neither a stock nor a non-stock corporation, LRTA does
not qualify as a GOCC. As pointed out by J. Dimaampao, under the doctrine laid
down in the 2006 MIAA Case, this alone already qualifies LRTA as a government
instrumentality, but if only to further refine this, the relevant provisions of the
Administrative Code must be read in conjunction with Section 3 (n) of the GOCC
Governance Act of 2011 51 that was obviously enacted after the 2006 MIAA Case,
and provides for a more specific definition of government instrumentalities, to wit:
As applied in this case, LRTA still clearly qualifies as a GICP/GCE under the
definition provided in Section 3 (n) of the GOCC Governance Act of 2011.
government
departmental framework
powers
As held in the 2019 LRTA Case, LRTA exists by virtue of a charter and its
powers and functions are vested in and exercised by its Board of Directors
independent of outside interference.
Undoubtedly, in light of the ruling in 2006 MIAA Case and the statutory
definition under the GOCC Governance Act of 2011, We conclude that LRTA is a
government instrumentality vested with corporate powers to perform efficiently its
governmental functions. LRTA is like any other government instrumentality, the
only difference is that LRTA is vested with corporate powers.
The City's myopic interpretation of the above provision holds no water and is
actually contradictory to its own position that LRTA is a GOCC. In line with Our
pronouncements in the 2006 MIAA Case, We must stress that the term government
instrumentality is a broader and more general term than GOCC, and hence should
be interpreted in such light. A government instrumentality may or may not be a
GOCC, but a GOCC is a government instrumentality by definition. By claiming
that LRTA is a GOCC, the City is already admitting that the LRTA is a government
instrumentality so there is no sense in claiming otherwise. The only issue at this
juncture is whether or not the LRTA, a government instrumentality, falls under the
definition of a GOCC.
For reference, it must be noted that We have already ruled several attached
agencies, including the MIAA and MCIAA (both are agencies attached to the
DOTr), to be government instrumentalities.
Applying the 2006 MIAA Case ruling, the Court, in Philippine Fisheries
Development Authority v. Court of Appeals, 61 held the Philippine Fisheries
Development Authority (PFDA), an agency attached to the Department of
Agriculture, to be a government instrumentality, to wit:
On 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.
Thus, the Authority which is tasked with the special public function
to carry out the government's policy "to promote the development of the
country's 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."
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.
local governments
A government instrumentality like LRTA falls under Section 133 (o) of the
Local Government Code, which states:
Section 133 (o) recognizes the basic principle that local governments cannot
tax the national government, as the former's power to tax is, historically, merely
delegated by the latter. While the 1987 Constitution now includes taxation as one of
the powers of local governments, local governments may only exercise such power
"subject to such guidelines and limitations as the Congress may provide." 65
We reiterate our ruling in the 2006 MIAA Case, which succinctly explains the
rule on the local governments' power to tax:
The reason for the rule does not apply in the case of
exemptions running to the benefit of the government itself or
its agencies. In such case the practical effect of an exemption is
merely to reduce the amount of money that has to be handled
by government in the course of its operations. For these
reasons, provisions granting exemptions to government
agencies may be construed liberally, in favor of non
tax-liability of such agencies.
Thus, Section 133 of the Local Government Code states that "unless
otherwise provided" in the Code, local governments cannot tax national
government instrumentalities. As this Court held in Basco v. Philippine
Amusements and Gaming Corporation:
The power to tax which was called by Justice Marshall as the "power
to destroy" (Mc Culloch v. Maryland, supra) cannot be allowed to defeat an
instrumentality or creation of the very entity which has the inherent power
to wield it. 66
Clearly, the general rule that tax exemption is strictly construed against the
taxpayer claiming the exemption does not apply in the instant case, as the legislature
itself created an exemption to national government instrumentalities from local
taxation. Thus, such exemption is construed liberally in favor of national
government instrumentalities, which includes LRTA.
a national government
public dominion
(1) Those intended for public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, banks, shores,
roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public use, and
are intended for some public service or for the development of the
national wealth.
ARTICLE 421. All other property of the State, which is not of the character
stated in the preceding article, is patrimonial property.
ARTICLE 422. Property of public dominion, when no longer intended for
public use or for public service, shall form part of the patrimonial property
of the State. (Emphasis supplied)
There is no question that the Light Rail Transit System (LRT) is devoted to
public use because the same was constructed with the intent of providing mass
transportation to the people to alleviate the traffic and transportation
situation in Metro Manila. Rail roads are of a similar nature with roads, as both
are man-made constructions on land to facilitate the passage of certain vehicles. In
fact, the LRT's rail roads and terminals are anchored at certain points, on public
roads, similar with elevated highways.
The mere fact that LRTA collects fees and other charges from the public does
not remove the character of the rail roads and terminals as properties for public use.
The operation by the government of an elevated highway or expressway with a toll
does not change the character of the road as one for public use. Someone must pay
for the maintenance of the road, either the public indirectly through the taxes they
pay the government, or only those among the public who actually use the road
through the toll fees they pay upon using the road. In fact, the tollway system is a
more efficient and equitable manner of taxing the public for the maintenance of
public roads. 67
The charging of fees to the public does not determine the character of the
property whether it is of public dominion or not. Article 420 of the Civil Code
defines property of public dominion as one "intended for public use." Even if the
government collects toll fees, the road is still "intended for public use" if anyone can
use the road under the same terms and conditions as the rest of the public. The
charging of fees, the limitation on the kind of vehicles that can use the road, the
speed restrictions and other conditions for the use of the road do not affect the
public character of the road. 68
The fees that the LRTA charges to passengers constitute the bulk of the
income that maintains the operations of LRTA and the LRT. The collection of such
fees does not change the character of the LRT as a mode of mass transportation for
public use. Such fees are often termed user's 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 user's tax is more equitable — a
principle of taxation mandated in the 1987 Constitution. 69
As properties of public dominion,
Philippines
public service
Even assuming arguendo that LRT was not constructed for public use, these
properties are owned by State and are clearly intended for some public service, which
falls under Article 420 (2) of the Civil Code.
In this regard, the records would show that the LRT, with all its rail roads and
terminals, are essentially constructed by the State through the LRTA, in accordance
with the State's transportation policy laid down in the LRTA charter. It was
undisputed that the LRTA acquired the subject properties through expropriation
proceedings, and that the national government has been subsidizing the LRTA for
the payment of its loans and interest payments for capital intensive projects such as
the LRT Line 1 (Baclaran-Roosevelt). 70 In fact, if only to show how much the
LRTA is reliant on the national government, the said LRT Line 1 would have ceased
operation if not for the national government's subsidies amounting to P5.895
billion. 71 Thus, We agree with LRTA's position that the real owner of these
properties is actually the State, especially considering the fact that said properties
could not have been obtained without the use of the State's inherent power of
eminent domain, which it merely delegated to the LRTA as its agent.
Thus, the inescapable conclusion is that the properties of the LRTA are not
merely patrimonial properties, but are properties of the public dominion that
cannot be subjected to real property tax.
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 Parañaque can
foreclose and compel the auction sale of the 600-hectare runway of the
MIAA for non-payment of real estate tax. 72
From the above, there is no reason why the same principle explained above
should not be applied to LRTA's properties, which are of the public dominion.
is not taxable
Section 234 (a) of the LGC exempts from real property tax any "[r]eal
property owned by the Republic of the Philippines." Section 234 (a) provides:
SEC. 234. Exemptions from Real Property Tax. — The following are
exempted from payment of the real property tax:
This 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 of the Philippines 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. 73
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 privilege. 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." 74
LRTA, as a government instrumentality, is not a taxable person under Section 133
(o) of the LGC. Thus, even if We assume that the Republic has granted to LRTA the
beneficial use of the LRT properties, such fact does not make these real properties
subject to real estate tax.
However, portions of the LRT properties that LRTA leases to private entities
are not exempt from real estate tax. For example, the land area occupied by private
concessionaires in certain LRT lines and terminals should be subject to real estate
tax. In such a case, LRTA 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, which, if only to be clear and as pointed out by J. Caguioa, must
consequently be paid by said taxable person; not LRTA. In Lung Center of the
Philippines v. Quezon City, 75 the Court ruled:
Under Article 420 of the Civil Code, the rail roads and terminals of the LRT,
being devoted to public use, are properties of public dominion and thus owned by
the State or the Republic of the Philippines. Article 420, while not specifically
mentioning "rail roads" or "rail road tracks," allow for the inclusion of properties of a
similar character. LRT rail roads, which necessarily include its terminals, are of a
similar character to public roads, as both are devoted for public use and both
facilitate transportation through certain vehicles. In any event, the LRT is owned by
the State through the LRTA, as its agent, and is definitely intended for some public
service, which is to provide mass transportation to the people to alleviate the traffic
and transportation situation in Metro Manila. Therefore, being properties of public
dominion owned by the Republic, there is no doubt that the LRT rail roads and
terminals are expressly exempt from real estate tax under Section 234 (a) of the LGC,
subject to the rule discussed above, and are not subject to execution or foreclosure
sale.
2. VOID all the real property tax assessments, as well as the warrants of
levy, issued by the City of Pasay, on petitioner's properties,
except the assessment covering the portions that petitioner has
leased to private parties, who are liable to pay the corresponding
real property tax.
SO ORDERED.
Separate Opinions
LEONEN, J., concurring:
I concur in the ponencia. In line with the parameters set in Manila
International Airport Authority v. Court of Appeals, 1 and as squarely held in Light
Rail Transit Authority v. Quezon City, 2 petitioner Light Rail Transit Authority is a
government instrumentality with corporate powers. Its properties are of public
dominion, which are exempt from real property tax.
Before delving on the main issue, I must point out that the Court of Appeals'
Decision and Resolution are void for lack of jurisdiction. Petitioner filed its appeal
from the Regional Trial Court's Decision in 2013, 3 after Section 7 of Republic Act
No. 1125 had been amended by Republic Act No. 9282 in 2004. Section 7, as
amended, enumerates the cases over which the Court of Tax Appeals exercises
jurisdiction:
Section 7 provides that the Court of Tax Appeals has exclusive appellate
jurisdiction over local tax cases decided by a regional trial court. Local tax cases
include cases involving real property tax, 4 as in this case. Hence, petitioner should
have filed the appeal before the Court of Tax Appeals, not the Court of Appeals.
Generally, the filing of appeal before the wrong court does not toll the period
to appeal, 5 and the trial court's decision consequently becomes final and executory.
Nonetheless, considering the importance of the issues involved and in the interest of
justice, this Court may proceed to resolve the issue in this case to correct a grave error
committed by the Regional Trial Court in dismissing the case before it.
II
ARTICLE 6
SECTION 16. The Congress shall not, except by general law, provide
for the formation, organization, or regulation of private corporations.
Government-owned or controlled corporations may be created or
established by special charters in the interest of the common good and
subject to the test of economic viability.
ARTICLE 2
Corporate Powers
Manila International Airport Authority holds that "[w]hen 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." 25
III
Under Section 234 (a) of the Local Government Code, real properties owned
by the Republic or any of its political subdivisions are exempt from real property tax,
except when their beneficial use has been granted, for consideration or otherwise, to
a taxable person.
(1) Those intended for public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, banks,
shores, roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public
use, and are intended for some public service or for the
development of the national wealth. (Emphasis
supplied)
All other properties of the State that are not of the character stated in Article
420 are classified as patrimonial properties. 28
In Manila International Airport Authority, this Court held that the Manila
International Airport Authority's airport lands and buildings are intended for public
use, and therefore, are properties of public dominion. Its collection of terminal fees
and other charges from the public does not remove the character of the airport lands
and buildings as properties for public use:
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. The operation by the government
of a tollway does not change the character of the road as one for public use.
Someone must pay for the maintenance of the road, either the public
indirectly through the taxes they pay the government, or only those among
the public who actually use the road through the toll fees they pay upon
using the road. The tollway system is even a more efficient and equitable
manner of taxing the public for the maintenance of public roads.
The charging of fees to the public does not determine the character
of the property whether it is of public dominion or not. Article 420 of the
Civil Code defines property of public dominion as one "intended for public
use." Even if the government collects toll fees, the road is still "intended for
public use" if anyone can use the road under the same terms and conditions
as the rest of the public. The charging of fees, the limitation on the kind of
vehicles that can use the road, the speed restrictions and other conditions for
the use of the road do not affect the public character of the road. 29
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. 32
However, portions of the lands and buildings that petitioner rented out to
private parties for their beneficial use are subject to real property tax, per the
exception clause in Section 234 (a) of the Local Government Code.
In the landmark MIAA case, the Court En Banc, citing the Administrative
Code of 1987 (Administrative Code), distinguished between a GOCC and a
government instrumentality and found that petitioner therein Manila International
Airport Authority (MIAA) is a government instrumentality and not a GOCC. The
Court explained as follows:
There is no dispute that a [GOCC] is not exempt from real estate tax.
However, MIAA is not a [GOCC]. Section 2(13) of the Introductory
Provisions of the Administrative Code of 1987 defines a [GOCC] as
follows:
Applying the parameters laid down in the MIAA case to determine whether a
government agency is an instrumentality or a GOCC, the Court thereafter ruled in
the 2019 LRTA case that the LRTA is an instrumentality of the government vested
with corporate powers to efficiently perform its governmental functions, and not a
GOCC.
For context, in the 2019 LRTA case, the local government of Quezon City
issued warrants of levy on the LRTA's properties on which realty taxes had not been
paid. The subject properties were eventually sold at public auction. But for lack of
interested bidders, they were instead sold to Quezon City. Invoking the MIAA case,
the LRTA sought to nullify the auction sale, claiming it is a government
instrumentality and hence, exempt from RPT. The Court extensively discussed the
reasons that led to its finding that the LRTA is a government instrumentality vested
with corporate powers and not a GOCC. Consequently, the LRTA was declared
exempt from RPT. Pertinent portions of the ruling read:
Under their respective Charters, both the LRTA and the MIAA do
not have capital stock that is divided into shares. To repeat, Section 3 of the
Corporation Code defines a stock corporation as one whose "capital stock is
divided into shares and x x x authorized to distribute to the holders of such
dividends x x x." The LRTA and the MIAA have capital but it is not a capital
stock or share capital, which is not divided into shares of stock. Neither of
them has stockholders nor voting shares. Hence, the LRTA — as the MIAA
— is not a stock corporation.
The LRTA is also not a non[-]stock corporation because it has no
members. Section 87 of the Corporation Code defines a non[-]stock
corporation as "one where no part of its income is distributable as dividends
to its members, trustees or officers." A non[-]stock corporation must have
members. Even if we assume that the government is considered as the sole
member of the LRTA, this will not make the LRTA a non[-]stock
[corporation]. Section 88 of the Corporation Code provides that non-stock
corporations are "organized for charitable, religious, educational,
professional, cultural, recreational, fraternal, literary, scientific, social, civil
service, or similar purposes, like trade, industry, agriculture and like
chambers." The LRTA is not organized for any of these purposes. As a
public utility, it is organized to operate the light rail transit system for public
use.
ARTICLE 2
CORPORATE POWERS
Further, the nature of the LRTA's properties was already fully threshed out in
the 2019 LRTA case. There, the Court determined that the properties registered in
the name of the LRTA are for public use and classified as property of public
dominion, and thus exempt from RPT under Section 234 (a) of the Local
Government Code of 1991 (LGC):
To be sure, the LRTA and its properties are tasked to establish the
light rail transit in the country. To pursue this mandate and purpose, the
LRTA pioneered the construction of light rail transit infrastructure, which
was financed through foreign loans. The revenues from the LRTA's
operations were designed to pay for the loans incurred for its construction.
The LRTA's operations were intended as a public utility rather than as a
profit-making mechanism. The income which the LRTA generates is being
used for its operations, especially the maintenance of rail tracks and trains. x
xx
Given the mandate and purpose of the LRTA, it stands to reason that
the LRTA's railroads, carriageways, terminal stations and the lots on which
they are found and/or constructed are properties of public dominion
intended for public use. As such, they are exempt from real property tax
under Section 234(a) of the Local Government Code.
Undoubtedly, the light rail transit performs a crucial role in the lives
of the people in Metro Manila. And the fact that by necessary implication, it
has to pass through several local government units, the protection accorded
to properties of public dominion for public use must be extended to the
LRTA and its properties. Taking some or a portion of the railroads, railways,
carriageways and terminal stations will literally hamper the operation of the
light rail transit. Trains run on the rail tracks which are fastened to a concrete
foundation resting on a prepared subsurface. Like an airport, the light rail
transit has a terminal commonly known as the LRT station. It is a hub
where passengers converge to buy train tickets and access the train facilities.
It is also where the trains regularly stop to load or unload passengers. These
properties are essential for the passenger transport and continued operation
of the light rail transit, without which this massive transportation system
will be paralyzed. 5
That there was a 2018 LRTA case 6 declaring that the LRTA is a GOCC and
not a government instrumentality vested with corporate powers did not prevent the
Court from rectifying the error. As it did a year later in the 2019 LRTA case, the
Court correctly applied prevailing jurisprudence. To be sure, the MIAA case has
become the precedent in determining whether a government entity or agency is an
instrumentality or agency of the National Government or a GOCC pursuant to
their definitions under the Administrative Code. More importantly, in the 2019
LRTA case, the Court had already determined the LRTA's status as a government
instrumentality exercising corporate powers by applying the criteria set in the MIAA
case.
In ruling that the LRTA properties belong to the Republic of the Philippines
and are exempt from RPT, the ponencia clarifies that portions of these properties
that the LRTA leases to private entities are not exempt from RPT. The ponencia
further cites an example that the land area occupied by private concessionaires in
certain LRT lines and terminals should be subject to RPT and explicitly states that it
is the taxable person who should pay the RPT. 7 Too, the ponencia states in the
dispositive portion that all the RPT assessments, as well as the warrants of levy,
issued by the City of Pasay, on the LRTA's properties are void, except the
assessment covering the portions that LRTA has leased to private parties,
who are liable to pay the corresponding RPT. 8
I expound.
Based on the foregoing, real property owned by the LRTA is generally exempt
from the payment of RPT. However, such exemption ceases when the beneficial use
thereof has been granted, for consideration or otherwise, to a taxable person.
Beneficial use means that the person or entity has the actual use and possession of
the property. 9
Section 234 (a) of the LGC must likewise be read in conjunction with Section
205 (d) of the same Code which provides:
Assessment is the act or process of determining the value of the property for
purposes of taxation. 10 Thus, in mandating that the assessment be made "in the
name of the possessor" of the property, the law clearly holds liable for RPT the
taxable person or entity which has the beneficial use of the property — and not the
Republic of the Philippines, government instrumentality or political subdivision,
who owns the property.
Sections 234 (a) and 205 (d) of the LGC had their counterparts in Sections 40
and 8, respectively of Presidential Decree No. 464 11 or the 1974 Real Property Tax
Code, to wit:
Imposing the liability to pay RPT on the beneficial user flows from the
fundamental principle governing our real estate taxation — that the assessment of
real property shall be based on its actual use. Actual use refers to the purpose for
which the property is principally or predominantly utilized by the person in
possession thereof. 13
Prior to the 1974 Real Property Tax Code, real property was taxed on the
basis of ownership or interest tantamount to ownership. 14 Later, the 1974 Real
Property Tax Code changed the basis of real property taxation by adopting a policy
of taxing real property on the basis of actual use, even if the user is not the
owner. 15 Thus, Sections 2, 3 (a) and 19 thereof provide:
(b) "Actual Use" refers to the purpose for which the property is
principally or predominantly utilized by the person in
possession thereof;
The earliest case is the 1980 case of City of Baguio v. Busuego, 16 where a real
property tax collection suit was instituted by the local government unit against the
purchaser in installment of the property belonging to the Government Service
Insurance System (GSIS). The Court found that under the parties' contract to sell,
the beneficial use of the property was transferred to the purchaser. The contract also
clearly imposed upon the purchaser the obligation to pay the real property tax even if
GSIS, a government corporation, is exempt from real property taxes. According to
the Court, such contractual stipulation is valid and binding. It is premised on the
principle that "the sole determinative factor for exemption from realty taxes is
the 'use' to which the property is devoted[.] And where 'use' is the test, the
ownership is immaterial." 17 The Court also found that such agreement was in
conformity with Section 40 (a) of the 1974 Real Property Tax Code. Thus, the
Court held that on the strength of the provision of Section 40 (a), the said property
is not exempt from real property tax. Consequently, the purchaser was made liable to
pay the real property taxes from the time the possession of such property was
transferred to him, although pending full payment of the purchase price, the seller
GSIS retains ownership and title over the property. 18
In the 1990 case of Testate Estate of Concordia T. Lim v. City of Manila 19
(Testate Estate of Concordia Lim case), the plaintiff therein was assessed for RPT,
which accrued at the time the properties were still in the name of GSIS because,
based on the Deed of Absolute Sale, plaintiff allegedly assumed to pay the taxes due.
However, during the time GSIS held the titles, the said properties were leased to
other persons. Plaintiff nonetheless paid the assessed taxes under protest and later on
filed a claim for refund. The Court granted plaintiff's claim and ordered the local
government unit to refund the taxes paid under protest. Citing Sections 3 (a) and 19
of the 1974 Real Property Tax Code, the Court held that "[i]n real estate taxation,
the unpaid tax attaches to the property and is chargeable against the taxable
person who had actual or beneficial use and possession of it regardless of
whether or not he is the owner." 20
The Court also ruled that not even GSIS can be made liable for the tax on the
subject properties leased to other persons because "tax should be based on 'actual use'
of the property." 21 This finds support in the clear provision of Section 40 of the
1974 Real Property Tax Code. The Court further held that "if there is anyone
liable [for payment of real property tax,] the law and applicable
jurisprudence point to the lessees of land owned by the [GOCC]." 22 The
Court, however, did not rule on the liabilities of the lessees because their identities
were not clear as they were never impleaded. 23
The ratio in the foregoing earlier cases was also applied by the Court in
succeeding cases governed by the provisions of the LGC. In the cases of Republic of
the Philippines v. City of Kidapawan, 24 National Power Corporation v. Province of
Quezon, et al., 25 (NPC case) and GSIS v. City Treasurer of the City of Manila, 26
where property of the Republic of the Philippines or a government instrumentality
is leased or transferred to taxable private individuals or entities, the Court held that
liability to pay real property taxes devolves upon the taxable beneficial user. The
Court explained that while generally, the liability for taxes rests on the owner of the
real property at the time the tax accrues owing to the necessary consequence that
proceeds from the fact of ownership, 27 personal liability for realty taxes may also
expressly vest on the entity with the beneficial use of the real property. 28 This
situation happens when tax is imposed on the property owned by the government
but leased to private persons or entities, or when the tax assessment is made on the
basis of the actual use of the property. 29 In either case, the Court has consistently
emphasized that "the unpaid realty tax attaches to the property but is directly
chargeable against the taxable person who has actual and beneficial use and
possession of the property regardless of whether or not that person is the
owner." 30
Furthermore, very recent cases promulgated by the Court reiterate the tax
liability of the beneficial user.
In the 2018 case of Herarc Realty Corporation v. Provincial Treasurer of
Batangas, 31 the Court stressed anew its ruling in Testate Estate of Concordia Lim
case that the liability to pay real property taxes on government-owned property rests
on the taxable entity exercising actual and beneficial use thereof, viz.:
In the same year, the Court decided the 2019 LRTA case in which the Court
stated that the liability to pay RPT on government-owned properties falls on the
beneficial user:
In the 2021 case of Estampador v. The City Assessor of Manila, 39 the Court
was tasked to resolve who between the property owner and the beneficial user the tax
liability falls. Citing the Philippine Heart Center case, the Court held that the
beneficial user bears the responsibility of paying the RPT that accrued on the parcel
of land during the effectivity of the lease agreement. The beneficial user, therefore, is
not entitled to claim a refund of the RPT paid under protest. 40
Still further, the Court just this year held in Unimasters Conglomeration, Inc.
v. Tacloban City Government 41 that the burden of paying the RPT due on the lease
of the hotel passed on to the private entity as the beneficial user thereof. Therein, the
hotel in question is owned in common by the Province of Leyte (a political
subdivision), as well as by the Privatization and Management Office (PMO) and
Philippine Tourism Authority, both of which are government instrumentalities
exempt from paying RPT. These co-owners entered into a Contract of Lease with
the private entity for the hotel. When the private entity stopped paying RPT despite
demand, the City Treasurer of Tacloban instituted a collection case against the
co-owners and the private entity. The Court of Tax Appeals (CTA) Division and
CTA En Banc found the private entity liable to pay the unpaid RPT. When the case
reached this Court, it agreed with the CTA En Banc that the private entity, as the
lessee of the hotel and the possessor and beneficial user thereof, was liable for RPT.
42
At the risk of being repetitive, I reiterate that: "the unpaid realty tax attaches
to the property but is directly chargeable against the taxable person who has actual
and beneficial use and possession of the property regardless of whether or not that
person is the owner." 43
Applying the foregoing principles to the present LRTA case, I agree that only
portions of the LRTA properties leased to taxable persons like the private
concessionaires are subject to RPT by the City of Pasay.
While I recognize that the private concessionaires cannot be held liable for
RPT in the present case because they were not impleaded as parties, the liability to
pay the RPT ultimately falls on them (private concessionaires) because they have
been granted actual and beneficial use of the portions of the LRTA properties. In
other words, the tax exemption, which the LRTA carries, is withdrawn the moment
the private concessionaires are granted beneficial use over the LRTA's real properties.
Since then, the tax liability has accrued, and the corresponding duty to pay the RPT
has devolved upon the private concessionaires as the taxable beneficial user.
I concur.
The ponencia harmonizes statutory and decisional law on the character of the
Light Railway Transit Authority (LRTA) and its properties. The Court's disposition
here culminates two decades of jurisprudential evolution, starting from the 2000 case
of Light Rail Transit Authority v. Central Board of Assessment Appeals, 1 all the way
to the 2019 case of Light Rail Transit Authority v. Quezon City (2019 LRTA Case). 2
With this decision, We finally lay to rest the issue of whether LRTA's properties are
exempt from real estate taxes (RPT) imposed by local government units.
administrative remedies is
On the procedural issue, I concur with the ponencia that this case is among
the exceptions to the doctrine of exhaustion of administrative remedies. As such, the
Regional Trial Court (RTC) and the Court of Appeals (CA) erred in exacting
compliance with the general rule of prior resort to a protest or appeal of the
assessment. The issue raised by LRTA justifies direct resort to the courts.
As a rule, before a party may seek judicial intervention, he or she should avail
of all the administrative processes afforded him or her. 3 Premature filing of a case in
court is fatal to one's cause of action. 4 These precepts stem from a recognition that
administrative redress may be more expeditious, as well as Our deference to the
technical expertise of other government agencies.
However, when the rationale for the rule is inexistent, the rule should be held
inapplicable. This is consistent with the maxim cessante ratione legis, cessat ipsa lex —
when the reason for the law ceases, the law itself ceases. Thus, case law has since
developed more than a dozen exceptions to the rule on exhaustion of administrative
remedies. 5 Among the notable ones is when the issue involved is a purely legal
question.
Further, in the context of tax assessments, the Court has ruled that a question
of law arises when the litigant questions the very authority and power of the taxing
authority to impose the assessment and collect the tax. 8 In contrast, when the
question relates to the reasonableness or correctness of the amount assessed, there is a
question of fact that may be raised in the administrative remedies under Republic
Act No. (RA) 7160, or the Local Government Code.9 These parameters were laid
down in the seminal case of Ty v. Trampe (Ty). 10
In the oft-cited case of Ty v. Hon. Trampe, the Court held that the
rule on exhaustion of administrative remedies does not apply when the
controversy does not involve questions of fact but only of law. The protest
contemplated under Section 252 of the LGC is required when there is
question as to the reasonableness or correctness of the amount
assessed, while an appeal to the LBAA under Section 226 is fruitful
only where questions of fact are involved. Accordingly, when the very
authority and power of the assessor to impose the assessment, and of
the treasurer to collect real property taxes are in question, the proper
recourse is a judicial action.
Similar to MWSS, the issue in this case is purely a legal question, i.e., whether
LRTA is a government instrumentality whose properties are exempt from RPT. The
issue turns on LRTA's charter vis-a-vis the Court's ruling in Manila International
Airport Authority v. Court of Appeals (2006 MIAA Case). 12 No reception of
evidence is necessary. As such, there is no need to go through the administrative
process set forth in the Local Government Code. The issue being one of law, its
resolution properly belongs to the courts. Thus, LRTA's resort to a Rule 65 petition
13 before the RTC is warranted.
Similarly, LRTA could not be faulted, and should not be considered estopped,
for previously admitting its tax liabilities, negotiating payment terms, and requesting
for condonation of penalties. These actions were presumably made on the
assumption that LRTA is a taxable entity, as pronounced in the 2000 case of Light
Rail Transit Authority v. Central Board of Assessment Appeals. 14 LRTA could not
have foreseen the ruling in the 2006 MIAA Case. Hence, LRTA's actions were
merely consistent with then-prevailing case law.
All told, I concur that LRTA's petition should be given due course
notwithstanding non-exhaustion of administrative remedies. The questions raised
call for the exercise of judicial power.
LRTA is a government
powers
Real properties owned by the Republic, whether titled in the name of the
Republic itself or in the name of agencies or instrumentalities of the national
government, are exempt from RPT. Corollary to this, Section 2 (10) of Executive
Order (EO) 292, the Administrative Code of 1987, defines "instrumentality" as "any
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." 15 From this definition, the Court introduced
a new category of government agencies in the landmark 2006 MIAA Case, viz.:
GICPs, which are generally exempted from local taxation.
GICPs are entities which are vested with corporate powers but are not
organized as stock or non-stock corporations. This category of governmental entities
was statutorily recognized upon the enactment of EO 596 on 29 December 2006.
Subsequently, in 2011, RA 10149, otherwise known as "GOCC Governance Act of
2011," was signed, further formalizing the creation of this new category, to wit:
Prescinding from the above, an agency will be classified as a GICP when the
following elements concur: (a) it performs governmental functions; and (b) it enjoys
operational autonomy. 17
I also concur with the ponencia that being an attached agency does not equate
to being "integrated within the departmental framework."
property tax
Indeed, no less than our Constitution guarantees the local autonomy of its
territorial and political subdivisions. 26 Consistent with this constitutional mandate,
each local government unit is granted the power to tax, by creating its own sources of
revenues and to levy taxes, fees, and charges, subject to the limitations which our
laws may provide. 27
(1) Those intended for public use, such as roads, canals, rivers, torrents,
ports and bridges constructed by the State, banks, shores, roadsteads, and
others of similar character;
(2) Those which belong to the State, without being for public use, and are
intended for some public service or for the development of the national
wealth.
Accordingly, I agree with the ponencia that LRTA is not liable to pay for RPT
on its real properties as it is a GICP.
From the cited provisions, it is clear that the general rule is local government
units may not levy taxes on the national government, its agencies, or
instrumentalities, unless the Local Government Code provides otherwise. 33 It has
been held that there is no point in national and local governments taxing one
another, as it would merely result to the transfer of public funds from one
government pocket to another. 34 Hence, for failure to establish any exception to the
general rule, LRTA may not be held liable for RPT on its real properties.
Likewise, I join the ponencia in its conclusion that LRTA's real properties are
part of the public dominion intended for public use.
The same conclusion was arrived at in the case of Philippine Heart Center v.
Local Government of Quezon City (Philippine Heart Center Case), 37 where petitioner
is a government instrumentality which renders essential public healthcare services.
Given the mandate and purpose of petitioner, this Court likewise found that its
properties are of public dominion intended for public use, and are thus exempt from
RPT.
It bears stressing that in the 2019 LRTA Case, 38 this Court was given the
opportunity to discuss the nature of LRTA's properties. It was stated therein that
the "light rail transit system is one of the major means of transportation in Metro
Manila" and therefore "performs a crucial role in the lives of the people." Given its
main purpose of providing a viable public transportation system, it was held that
LRTA's railroads, carriageways, terminal stations, and the lots on which they are
situated are properties of public dominion intended for public use, and are therefore
exempt from RPT.
From the above pronouncement, it can be derived that the fact that beneficial
use of the portions of LRTA's properties was granted to taxable entities must be
alleged and proven with sufficient evidence. 41 Further, the liability for RPT in such
a situation falls on the taxable entities, and the corresponding assessments must be
duly served on them. 42
In any case, ultimately, I agree with the ponencia's determination that LRTA's
real properties devoted for public use are not subject to RPT.
*** No part.
2. Id. at 25-28. Penned by Associate Justice Mario V. Lopez (now a Member of the
Court), and concurred in by Associate Justice Jose C. Reyes (a retired Member
of the Court) and Associate Justice Socorro B. Inting.
3. Id. at 29. Penned by Associate Justice Mario V. Lopez (now a Member of the
Court), and concurred in by Associate Justice Jose C. Reyes (a retired Member
of the Court) and Associate Justice Socorro B. Inting.
4. Id. at 25.
5. Id. at 26.
6. Id.
9. Id. at 101-102.
23. Id. at 8.
27. Philippine Coconut Producers Federation, Inc. v. Republic, 679 Phil. 508, 568
(2012).
34. Mactan-Cebu International Airport Authority v. City of Lapu-Lapu, 759 Phil. 296
(2015).
35. Mactan-Cebu International Airport Authority v. Marcos, 330 Phil. 392 (1996).
37. See Light Rail Transit Authority v. Alvarez, 801 Phil. 40 (2016); Light Rail
Transit Authority v. Mendoza, 767 Phil. 458 (2015); Light Rail Transit
Authority v. Salvaña, 736 Phil. 123 (2014); Hugo v. LRTA, 630 Phil. 145
(2010); and Light Rail Transit Authority v. Venus, Jr., 520 Phil. 233 (2006).
41. Dela Cruz v. Ochoa Jr., 824 Phil. 269, 280 (2018), citing Ty v. Banco Filipino
Savings and Mortgage Bank, 689 Phil. 603, 614 (2012).
42. Id.
43. Luces v. Coca-Cola Bottlers Phils., Inc., G.R. No. 213816, December 2, 2020.
44. Mactan-Cebu International Airport Authority v. City of Lapu-Lapu, supra note
35.
47. Id.
52. Section 2 (4) of the introductory Provisions of the Administrative Code of 1987.
53. Sections 2 and 15 of Executive Order No. 603, Series of 1980, as amended.
55. Sections 2 and 4, Executive Order No. 603, Series of 1980, as amended.
56. Section 15, Executive Order No. 603, Series of 1980, as amended by Executive
Order No. 830, Series of 1982.
58. Sections 6 and 7, Executive Order No. 603, Series of 1980, as amended.
65. Manila International Airport Authority v. Court of Appeals, supra note 7 at 214.
68. Id.
69. Id.
74. Id.
3. Ponencia, p. 3.
4. City of Lapu-Lapu v. Philippine Economic Zone Authority, 748 Phil. 473, 529
(2014) [Per J. Leonen, Second Division].
5. Id. at 533.
7. As amended by Executive Order No. 830 (1982) and Executive Order No. 210
(1987).
18. G.R. No. 97149, March 31, 1992 [Per J. Romero, En Banc].
19. Id.
25. Manila International Airport Authority v. Court of Appeals, 528 Phil. 181, 212
(2006) [Per J. Carpio, En Banc].
(o) Taxes, fees or charges of any kind on the National Government, its agencies and
instrumentalities, and local government units.
SECTION 234. Exemptions from Real Property Tax. — The following are exempted
from payment of the real property tax:
Except as provided herein, any exemption from payment of real property tax
previously granted to, or presently enjoyed by, all persons, whether natural or
juridical, including all government-owned or -controlled corporations are hereby
withdrawn upon the effectivity of this Code. (Emphasis supplied)
29. Manila International Airport Authority v. Court of Appeals, 528 Phil. 181,
216-217 (2006) [Per J. Carpio, En Banc].
31. Light Rail Transit Authority v. Quezon City, G.R. No. 221626, October 9, 2019,
<https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/66014> [Per J.
Lazaro-Javier, Second Division].
32. Manila International Airport Authority v. Court of Appeals, 528 Phil. 181,
224-225 (2006) [Per J. Carpio, En Banc].
6. Light Rail Transit Authority v. City of Manila, G.R. No. 212925, June 18, 2018
(Unsigned Resolution).
7. Ponencia, p. 29.
8. Id. at 30.
10. LOCAL GOVERNMENT CODE OF 1991, Title II, Chapter I, Sec. 199 (f).
11. ENACTING A REAL PROPERTY TAX CODE, approved on May 20, 1974.
12. The difference between the subject Sections in the LGC and the 1974 Real
Property Tax Code is the exclusion of government-owned corporations in the
former.
13. LOCAL GOVERNMENT CODE OF 1991, Title II, Chapter I, Sec. 199 (b).
14. Province of Nueva Ecija v. Imperial Mining Co., Inc., 204 Phil. 262, 265 (1982).
15. Id. at 265; emphasis supplied.
17. Id. at 223, citing Martin on the Rev. Adm. Code, 1961, Vol. II, p. 487; emphasis
supplied.
22. Id., citing Province of Nueva Ecija v. Imperial Mining Co., Inc., supra note 14;
emphasis supplied.
23. Id.
26. G.R. No. 186242, December 23, 2009, 609 SCRA 330.
27. National Power Corporation v. Province of Quezon, et al., supra note 25, at 467,
citing City of Baguio v. Busuego, supra note 16.
28. Id., citing Republic of the Philippines v. City of Kidapawan, supra note 24, at 467,
also citing Vitug and Acosta, Tax Law and Jurisprudence (2000 ed.), p. 490.
29. Id.
30. Id. at 467-468; emphasis and italics in the original, citations omitted.
33. G.R. No. 211839, March 18, 2019, 897 SCRA 231.
35. Light Rail Transit Authority v. Quezon City, supra note 1, at 612-613; emphasis
and underscoring supplied; italics omitted.
38. Id.
39. G.R. No. 227288, March 18, 2021 (Unsigned Resolution).
40. Id.
42. Id.
43. Id., citing MWSS v. Central Board of Assessment Appeals, G.R. No. 215955,
January 13, 2021.
4. Id.
5. Province of Zamboanga Del Norte v. Court of Appeals, 396 Phil. 709 (2000):
6. Supra at 505.
7. Id.
9. Id.; See THE LOCAL GOVERNMENT CODE, Secs. 226 and 252.
10. Supra.
11. G.R. No. 215955, 13 January 2021.
14. Supra.
15. See Philippine Heart Center v. Local Government of Quezon City, G.R. No.
225409, 11 March 2020.
16. See Executive Order No. 596; Republic Act No. 10149; Metropolitan Waterworks
and Sewerage System v. Central Board of Assessment Appeals, supra; Philippine
Heart Center v. Local Government of Quezon City, supra; Light Rail Transit
Authority v. Quezon City, supra; Metropolitan Waterworks and Sewerage
System v. Local Government of Quezon City, G.R. No. 194388, 07 November
2018; and Manila International Airport Authority v. Court of Appeals, supra.
17. See Executive Order No. 596; Republic Act No. 10149; Philippine Heart Center v.
Local Government of Quezon City, supra; Light Rail Transit Authority v.
Quezon City, supra; Metropolitan Waterworks and Sewerage System v. Local
Government of Quezon City, supra; and Manila International Airport
Authority v. Court of Appeals, supra.
19. Id. at Sec. 3. See also Light Rail Transit Authority v. Quezon City, supra.
20. ARTICLE 2
CORPORATE POWERS
SEC. 4. General Powers. — The Authority, through the Board of Directors, may
undertake such actions as are expedient for or conducive to the attainment of the
purposes and objectives of the Authority, or of any purpose reasonably incidental to
or consequential upon any of these purposes.
21. Beja, Sr. v. Court of Appeals, G.R. No. 97149, 31 March 1992.
22. Supra.
23. Id.
24. See Peñafrancia Shipping Corp. v. 168 Shipping Lines, Inc., G.R. No. 188952, 21
September 2016.
25. See City of Lapu-Lapu v. Phil. Economic Zone Authority, 748 Phil. 473, 541
(2014).
26. CONSTITUTION, Article X, Sec. 1.
32. Supra.
35. Supra.
37. Supra.
38. Supra.
40. Supra.
||| (Light Rail Transit Authority v. City of Pasay, G.R. No. 211299, [June 28, 2022])