Professional Documents
Culture Documents
168557 February 16, and National Power Corporation (NPC), employees and (ii) construction permit
2007 respectively. The first is a petition for fees, environmental permit fees and
review on certiorari assailing the August other similar fees and charges) and (b)
FELS ENERGY, INC., Petitioner, 25, 2004 Decision1 of the Court of all real estate taxes and assessments,
vs. Appeals (CA) in CA-G.R. SP No. 67490 rates and other charges in respect of the
THE PROVINCE OF BATANGAS and and its Resolution2 dated June 20, 2005; Power Barges.6
the second, also a petition for review on
THE OFFICE OF THE PROVINCIAL certiorari, challenges the February 9, Subsequently, Polar Energy, Inc.
ASSESSOR OF 2005 Decision3 and November 23, 2005 assigned its rights under the Agreement
BATANGAS, Respondents. Resolution4 of the CA in CA-G.R. SP No. to FELS. The NPC initially opposed the
67491. Both petitions were dismissed on assignment of rights, citing paragraph
the ground of prescription. 17.2 of Article 17 of the Agreement.
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x
The pertinent facts are as follows: On August 7, 1995, FELS received an
G.R. No. 170628 February 16, assessment of real property taxes on the
2007 On January 18, 1993, NPC entered into power barges from Provincial Assessor
a lease contract with Polar Energy, Inc. Lauro C. Andaya of Batangas City. The
over 3x30 MW diesel engine power assessed tax, which likewise covered
NATIONAL POWER
barges moored at Balayan Bay in those due for 1994, amounted to
CORPORATION, Petitioner,
Calaca, Batangas. The contract, ₱56,184,088.40 per annum. FELS
vs.
denominated as an Energy Conversion referred the matter to NPC, reminding it
LOCAL BOARD OF ASSESSMENT
Agreement5 (Agreement), was for a of its obligation under the Agreement to
APPEALS OF BATANGAS, LAURO C.
period of five years. Article 10 reads: pay all real estate taxes. It then gave
ANDAYA, in his capacity as the
NPC the full power and authority to
Assessor of the Province of
10.1 RESPONSIBILITY. NAPOCOR represent it in any conference regarding
Batangas, and the PROVINCE OF
shall be responsible for the payment of the real property assessment of the
BATANGAS represented by its
(a) all taxes, import duties, fees, charges Provincial Assessor.
Provincial Assessor, Respondents.
and other levies imposed by the National
Government of the Republic of the In a letter7 dated September 7, 1995,
DECISION
Philippines or any agency or NPC sought reconsideration of the
instrumentality thereof to which POLAR Provincial Assessor’s decision to assess
CALLEJO, SR., J.: may be or become subject to or in real property taxes on the power barges.
relation to the performance of their However, the motion was denied on
Before us are two consolidated cases obligations under this agreement (other September 22, 1995, and the Provincial
docketed as G.R. No. 168557 and G.R. than (i) taxes imposed or calculated on Assessor advised NPC to pay the
No. 170628, which were filed by the basis of the net income of POLAR assessment.8 This prompted NPC to file
petitioners FELS Energy, Inc. (FELS) and Personal Income Taxes of its a petition with the Local Board of
Assessment Appeals (LBAA) for the nevertheless considered real property for ineffectual, nugatory and illusory any
setting aside of the assessment and the taxation purposes because they are resolution or judgment which the Board
declaration of the barges as non-taxable installed at a specific location with a would issue.
items; it also prayed that should LBAA character of permanency. The LBAA also
find the barges to be taxable, the pointed out that the owner of the barges– Meantime, the NPC filed a Motion for
Provincial Assessor be directed to make FELS, a private corporation–is the one Intervention15 dated August 7, 1998 in the
the necessary corrections.9 being taxed, not NPC. A mere agreement proceedings before the CBAA. This was
making NPC responsible for the payment approved by the CBAA in an
In its Answer to the petition, the of all real estate taxes and assessments Order16 dated September 22, 1998.
Provincial Assessor averred that the will not justify the exemption of FELS;
barges were real property for purposes such a privilege can only be granted to During the pendency of the case, both
of taxation under Section 199(c) of NPC and cannot be extended to FELS. FELS and NPC filed several motions to
Republic Act (R.A.) No. 7160. Finally, the LBAA also ruled that the admit bond to guarantee the payment of
petition was filed out of time. real property taxes assessed by the
Before the case was decided by the Provincial Assessor (in the event that the
LBAA, NPC filed a Manifestation, Aggrieved, FELS appealed the LBAA’s judgment be unfavorable to them). The
informing the LBAA that the Department ruling to the Central Board of bonds were duly approved by the CBAA.
of Finance (DOF) had rendered an Assessment Appeals (CBAA).
opinion10 dated May 20, 1996, where it is On April 6, 2000, the CBAA rendered a
clearly stated that power barges are not On August 28, 1996, the Provincial Decision17 finding the power barges
real property subject to real property Treasurer of Batangas City issued a exempt from real property tax. The
assessment. Notice of Levy and Warrant by dispositive portion reads:
Distraint13over the power barges, seeking
On August 26, 1996, the LBAA rendered to collect real property taxes amounting WHEREFORE, the Resolution of the
a Resolution11 denying the petition. The to ₱232,602,125.91 as of July 31, 1996. Local Board of Assessment Appeals of
fallo reads: The notice and warrant was officially the Province of Batangas is hereby
served to FELS on November 8, 1996. It reversed. Respondent-appellee
WHEREFORE, the Petition is DENIED. then filed a Motion to Lift Levy dated Provincial Assessor of the Province of
FELS is hereby ordered to pay the real November 14, 1996, praying that the Batangas is hereby ordered to drop
estate tax in the amount of Provincial Assessor be further restrained subject property under ARP/Tax
₱56,184,088.40, for the year 1994. by the CBAA from enforcing the disputed Declaration No. 018-00958 from the List
assessment during the pendency of the of Taxable Properties in the Assessment
appeal. Roll. The Provincial Treasurer of
SO ORDERED.12
Batangas is hereby directed to act
On November 15, 1996, the CBAA accordingly.
The LBAA ruled that the power plant
issued an Order14 lifting the levy and
facilities, while they may be classified as
distraint on the properties of FELS in SO ORDERED.18
movable or personal property, are
order not to preempt and render
Ruling in favor of FELS and NPC, the Provincial Assessor of Batangas WHEREFORE, the petition for review is
CBAA reasoned that the power barges is likewise hereby affirmed. DENIED for lack of merit and the
belong to NPC; since they are actually, assailed Resolutions dated July 31, 2001
directly and exclusively used by it, the SO ORDERED.21 and October 19, 2001 of the Central
power barges are covered by the Board of Assessment Appeals are
exemptions under Section 234(c) of R.A. FELS and NPC filed separate motions AFFIRMED.
No. 7160.19 As to the other jurisdictional for reconsideration, which were timely
issue, the CBAA ruled that prescription opposed by the Provincial Assessor. The SO ORDERED.24
did not preclude the NPC from pursuing CBAA denied the said motions in a
its claim for tax exemption in accordance Resolution22 dated October 19, 2001. On September 20, 2004, FELS timely
with Section 206 of R.A. No. 7160. The filed a motion for reconsideration seeking
Provincial Assessor filed a motion for the reversal of the appellate court’s
Dissatisfied, FELS filed a petition for
reconsideration, which was opposed by decision in CA-G.R. SP No. 67490.
review before the CA docketed as CA-
FELS and NPC.
G.R. SP No. 67490. Meanwhile, NPC
filed a separate petition, docketed as Thereafter, NPC filed a petition for
In a complete volte face, the CBAA CA-G.R. SP No. 67491. review dated October 19, 2004 before
issued a Resolution20 on July 31, 2001 this Court, docketed as G.R. No. 165113,
reversing its earlier decision. The fallo of assailing the appellate court’s decision in
On January 17, 2002, NPC filed a
the resolution reads: CA-G.R. SP No. 67490. The petition
Manifestation/Motion for Consolidation in
CA-G.R. SP No. 67490 praying for the was, however, denied in this Court’s
WHEREFORE, premises considered, it consolidation of its petition with CA-G.R. Resolution25 of November 8, 2004, for
is the resolution of this Board that: SP No. 67491. In a Resolution23 dated NPC’s failure to sufficiently show that the
February 12, 2002, the appellate court CA committed any reversible error in the
(a) The decision of the Board directed NPC to re-file its motion for challenged decision. NPC filed a motion
dated 6 April 2000 is hereby consolidation with CA-G.R. SP No. for reconsideration, which the Court
reversed. 67491, since it is the ponente of the denied with finality in a
latter petition who should resolve the Resolution26 dated January 19, 2005.
(b) The petition of FELS, as well request for reconsideration.
as the intervention of NPC, is Meantime, the appellate court dismissed
dismissed. NPC failed to comply with the aforesaid the petition in CA-G.R. SP No. 67491. It
resolution. On August 25, 2004, the held that the right to question the
(c) The resolution of the Local Twelfth Division of the appellate court assessment of the Provincial Assessor
Board of Assessment Appeals of rendered judgment in CA-G.R. SP No. had already prescribed upon the failure
Batangas is hereby affirmed, 67490 denying the petition on the ground of FELS to appeal the disputed
of prescription. The decretal portion of assessment to the LBAA within the
(d) The real property tax the decision reads: period prescribed by law. Since FELS
assessment on FELS by the had lost the right to question the
assessment, the right of the Provincial
Government to collect the tax was Assuming arguendo that the subject THE COURT OF APPEALS GRAVELY
already absolute. power barges are subject to real estate ERRED IN NOT HOLDING THAT THE
tax, whether or not it should be NPC POWER BARGES ARE NOT SUBJECT
NPC filed a motion for reconsideration which should be made to pay the same TO REAL PROPERTY TAXES.
dated March 8, 2005, seeking under the law.
reconsideration of the February 5, 2005 III
ruling of the CA in CA-G.R. SP No. D.
67491. The motion was denied in a THE COURT OF APPEALS GRAVELY
Resolution27 dated November 23, 2005. Assuming arguendo that the subject ERRED IN NOT HOLDING THAT THE
power barges are real properties, ASSESSMENT ON THE POWER
The motion for reconsideration filed by whether or not the same is subject to BARGES WAS NOT MADE IN
FELS in CA-G.R. SP No. 67490 had depreciation just like any other personal ACCORDANCE WITH LAW.30
been earlier denied for lack of merit in a properties.
Resolution28 dated June 20, 2005. Considering that the factual antecedents
E. of both cases are similar, the Court
On August 3, 2005, FELS filed the ordered the consolidation of the two
petition docketed as G.R. No. 168557 Whether the right of the petitioner to cases in a Resolution31 dated March 8,
before this Court, raising the following question the patently null and void real 2006.1awphi1.net