Republic of the Philippines

CENTRAL BOARD OF ASSESSMENT APPEALS M a n i l a

THE CITY ASSESSOR OF QUEZON CITY, Respondent-Appellant,

– versus –

THE BOARD OF ASSESSMENT APPEALS OF QUEZON CITY,
Appellee,

CBAA Case No. L-09 Re: Tax Declaration Nos. C-126-02102-C
C-126-02103-C Quezon City

– and –

ROBINSON’S LAND CORPORATION, Petitioner-Appellee,
x – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – x

D E C I S I O N

BEFORE this Board is an Appeal by Respondent-Appellant, the City

Assessor of Quezon City, on the Decision of the Appellee, Board of

Assessment Appeals of Quezon City, dated July 12, 1993, the dispositive

portion of which provides as follows, viz:

“Wherefore, considering the afore-mentioned ruling of the CBAA, this Board hereby declares that Tax Declarations No. C-126-02102-C and C-126-02103-C are likewise void and, therefore unenforceable. The City Assessor is hereby directed to prepare a new assessment of the property under appeal based on the Schedule of Market Values existing prior to the schedule voided by the Central Board of Assessment Appeals.”

Respondent-Appellant, in his Appeal, assigned the following errors, viz:

The Local Board of Assessment Appeals erred and gravely abused its discretion amounting to lack of or in excess of jurisdiction:

(a) in giving due course to the appeal of Petitioner-Appellee, Robinson’s Land Corporation, notwithstanding its failure to comply with the jurisdictional procedural requirements which are conditions sine qua non to the exercise of the right to appeal.

(b) in not holding that, since the assessed tax was not paid at all, the Board cannot acquire jurisdiction over the case:

(c) in holding that the tax declarations involved herein are null and void;

(d) in directing Respondent-Appellant to prepare a new assessment of the property involved herein on the basis of the schedule of market values existing prior to the schedule voided by the Central Board of Assessment Appeals when the improvements were not yet existing, contrary to and in violation of Section 5 of P.D. 464.

The facts of the case in brief are as follows:

Reference: Book VII, pp. 113-128

Sometime on September 11, 1991, Petitioner-Appellee, Robinson’s Land

Corporation, for the first time received a Statement of Delinquency and Demand

for payment of real property taxes on its real properties consisting of buildings

(shopping malls) covered by Tax Declaration No. C-126-02102-C, in the total

amount of P5,442,440.76, representing real property taxes thereof for the year

1991, together with a photocopy of the owner’s copy of the aforementioned tax

declaration, covering real property consisting of a building (shopping mall)

located at the corner of EDSA and Ortigas Avenue, Ugong Norte, Quezon City

which assessed said property at P 403,143,760.00, effective 1991. Petitioner-

Appellee alleges that there was no Notice of Assessment attached to the said

Statement, neither had they received any such Notice.

Upon receipt of the above Statement of Delinquency, on October 22,

1991, Petitioner-Appellee, sought an administrative relief from Respondent-

Appellant, on the ground that the assessment under Tax Declaration No. C-

126-02102-C, is excessive and without legal basis and further requested that

aforesaid tax declaration be cancelled and a new tax declaration be issued

adopting the old Schedule of Base Unit Construction Cost for Buildings for

1981-84 general revision. No action was taken by Respondent-Appellant, thus

Petitioner-Appellee on October 30, 1994 filed an Appeal with the Appellee Local

Board. While the Appeal was still pending with the Appellee Local Board

Petitioner-Appellee, on December 12, 1991, received another letter from

Respondent-Appellant, together with a Notice of Assessment and the owner’s

copy of Tax Declaration No. C-126-02103-C, increasing the assessments of the

said building (shopping malls) from P403,143,760 to P538,649,920.00, real

property taxes to commence with the year 1992. It appears that both tax

declarations cover the same building. The increase in the assessment was due

to the additional area completed and occupied and the introduction of additional

auxiliary improvements on the existing building (shopping malls) under Tax

Declaration No. C-126-02102-C.

Reference: Book VII, pp. 113-128

Again by virtue of such increase Petitioner-Appellee filed another appeal

with Appellee Local Board, on the increased assessments of Respondent-

Appellant, under TD No. C-136-02102-C, with Appellee Local Board.

Treated as one appeal, the Appellee Local Board, in a hearing conducted

on March 18, 1992, decided upon agreement of the parties, that action on these

cases should be deferred in view of the Restraining Order by the Supreme

Court in G.R. No. 97618 (CBAA Case No. 261), entitled Ismael Mathay, Jr.

versus Hon. Victor Macalincag, et al., and that Appellee Local Board shall wait

for the Supreme Court decision on the above G.R. No. 97618 before it could

render its own decision on the appeal.

On February 24, 1993, the Central Board, rendered its decision on the

Ismael Mathay, Jr. case, supra, “declaring null and void”, and therefore

unenforceable the subject Schedule of Market Values for all classes of lands in

Quezon City, as prepared solely by Respondent-Appellant City Assessor, being

contrary to and in violation of Section 9 of P.D. 921. On the basis of the Ismael

Mathay, Jr. case decision of this Board, Appellee Local Board, on July 22,

1993, declared that Tax Declaration No. C-126-02102-C and C-126-02103-C

are likewise void and, therefore, unenforceable, and directed Respondent-

Appellant to prepare a new assessment of the questioned property, based on

the Schedule of Market Values existing prior to the schedule voided by this

Board in the Ismael Mathay, Jr. case which was affirmed by the Supreme Court

(see SC Resolution on G.R. No. 97618, dated December 16, 1993).

A motion for reconsideration was filed by Respondent-Appellant on the

decision of Appellee Local Board, but the same was denied.

HENCE, this Appeal by Respondent-Appellant before this Board.

The First and Second issues are interrelated.

It appears that Respondent-Appellant questions the authority of the

Appellee Local Board to assume jurisdiction of the Appeal, inspite of the fact

that Petitioner-Appellee failed to comply with the jurisdictional requisite of

Reference: Book VII, pp. 113-128

payment of real property taxes on the questioned assessment before Appellee

Local Board can assume authority to hear and decide the appeal.

Consequently, he maintains that Appellee Local Board acted without or in

excess of jurisdiction or gravely abused its discretion.

On the other hand, Petitioner-Appellee contends that it cannot be

required to pay real property taxes in view of the Restraining Order of the

Supreme Court in G.R. No. 97668. Respondent-Appellant in answer avers that

the assessments and taxes due on Tax Declaration No. C-126-02102-C and C-

126-02103-C involve initial assessments, and new taxes, hence the aforesaid

Restraining Order does not apply.

Petitioner-Appelle’s contention is devoid of merit. What had been

restrained in the Ismael Mathay, Jr. Decision is payment of taxes due on the

increased assessments on real property taxes on all classes of lands in Quezon

City, based on the Schedule of Market Values for lands, and not on buildings

newly assessed under Section 24 of P.D. 464, which provides as follows:

“Sec. 24. Date of Effectivity of Assessment or Reassessment. All assessment or reassessment made after the first day of January of any year shall take effect on the first day of January of the succeeding year: Provided, however, that the reassessment of real property due to its partial or total destruction, or to a major change in its actual use, or to any great and sudden inflation or deflation of real property values, or to the gross illegality of the assessment when made or to any other abnormal cause, shall be made within ninety days from the date any such cause or causes occurred, the same to take effect at the beginning of the quarter next following the reassessment.”

which are not subject to a general revision and which by reason thereof,

taxpayers are given an option to pay taxes on the old assessments. The

Supreme Court Restraining Order does not cover taxes due on new

assessments nor payment of taxes under protest on assessments of properties

subject of an appeal with the Local Board, as in the instant case. Appellee

Local Board, in the appeal at bar should have suspended the hearing of the

case until taxes had been paid pursuant to Section 37 of PD 464 or issue an

order requiring the Petitioner-Appellee to pay the taxes. However, the records

of the case show that Petitioner-Appellee, had availed of the Tax Amnesty

Reference: Book VII, pp. 113-128

Program, granted by Mayor Mathay of Quezon City on delinquent real property

taxpayers and paid its taxes at a reduced amount last September 30, 1993.

(Certification, Records, Annex “C” of Petitioner-Appellee). This Board considers

payment as a substantial compliance of the law, for purposes of this Appeal.

Accordingly, this issue becomes moot and academic.

Anent the third and fourth issues, this Board quotes herein the dispositive

portion of its decision in the Ismael Mathay, Jr. case which was approved and

adopted by the Supreme Court in G.R. No. 97618, viz:

“Wherefore judgment is hereby rendered declaring as this Board hereby declares, null and void, and, therefore unenforceable the subject Schedule of Market Values for all classes of lands in Quezon City, as prepared solely by Respondent, City Assessor of Quezon City being contrary to and in violation of Section 9, P.D. 921.”

Appellee Local Board, without going into the merits of the case concluded that

the aforequoted decision of this Board includes the Schedule of Base Unit

Construction Cost for all buildings in Quezon City. It does not. The ruling

pertains only to Schedule of Market Values for all classes of lands.

Granting en arguendo, that the decision of this Board in the Mathay case

includes that of the Schedule of Base Unit Construction Cost for Buildings. It

cannot be denied that the said Schedule of Base Unit Construction Cost of

Buildings prepared solely and adopted by Respondent-Appellant, suffered the

same infirmities and irregularities in its preparation as that of the Schedule of

Market Values for all classes of lands in Quezon City, which was declared null

and void in our decision. This Board, therefore, under the principle of “stare

decisis” so declares on its own and on the basis of the evidences and merits of

this Appeal, that the Schedule of Market Values (Schedule of Base Unit

Construction Cost) for all classes of buildings in Quezon City is null and void,

and, therefore unenforceable, as prepared solely by Respondent-Appellant,

City Assessor of Quezon City, being contrary to and in violation of Section 9,

PD 921.

Reference: Book VII, pp. 113-128

However, by the annulment of the aforesaid Schedule of Base Unit

Construction Cost, what then should be the basis of Respondent-Appellant in

the assessment of buildings newly constructed and completed in 1990?

Valuation of lands is based on gathered statistical data for the past revision

years, as distinguished from valuation of buildings which is based on current

prices of material, administrative and construction cost and labor. The former

can be frozen by assessment regulations but construction costs, materials and

labor cannot be. Hence, the order of Appellee Local Board to the Respondent-

Appellant, to prepare a new assessment on the properties under Appeal before

this Board, based on the Schedule of Market Values (1981-1984) existing prior

to the Schedule of Market Values (1991) voided by this Board is devoid of legal

basis. It is of judicial knowledge that the general revision of real property

assessments effective January 1, 1983, was moved to January, 1985, per

Executive Order No. 812, but Executive Order No. 73, implemented by Joint

Local Assessment/Treasury Regulations Nos. 2-86, reset the effectivity of

January 1, 1987, and Memorandum Circular No. 77, finally reset the effectivity

to July 1, 1987.

As regards assessments of newly constructed buildings, Sections 3 and

4 of Assessment Regulations No. 1-82, implemented Executive Order No. 812

which provide as follows:

“Sec. 3. Basis for the Collection of 1983 and 1984 Taxes. – In view of the extension of the 1981-82 general revision of real property assessments to June 30, 1984, the real property taxes due for the years 1983 and 1984 shall be computed on the basis of the assessed values of real property determined according to the 1978 approved Schedules of Values, except the taxes due on new constructions and newly discovered properties, which shall be computed as provided for in the succeeding Sections.

Sec. 4. Assessment of Newly Constructed Buildings. – The initial assessment of newly constructed and finished building whose effectivity year pursuant to Section 24 of PD 464, is 1983 or 1984 shall be determined in accordance with the 1981-82 Schedule of Unit Construction Cost for buildings duly approved by the Ministry of Finance.”

Section 2 of Executive Order No. 812, dated June 22, 1982, further

provides as follows:

Reference: Book VII, pp. 113-128

“Sec. 2. Applicability of the 1981-82 Schedule of Market Values. – The Schedule of Market Values for lands and the Schedule of Unit Construction Cost for Buildings, duly approved by the Minister of Finance, for the 1981-82 General Revision of real property assessments shall be applied as the basis for the said general revision of real property assessments, which as provided for in the Executive Order will take effect on January 1, 1985.”

Thus with respect to assessment of newly constructed and finished

buildings, its effectivity year pursuant to Section 24 P.D. 464 is 1983 or 1984,

and the assessment shall be determined in accordance with the 1981-82

schedule, but not to buildings constructed and completed in 1990 or 1991 or

those completed after 1985. In effect, therefore, there was not a Schedule of

Market Values for buildings from 1985 to 1991 and in the absence of an

approved schedule for buildings, Sections 5 and 22 of P.D. 464 shall be the

basis of the assessor in the assessment of newly constructed buildings after

1985.

Accordingly, subject buildings having been constructed and completed in

1990 and 1991, Sections 5 and 22 of P.D. 464 are applicable which are

hereinbelow quoted, viz:

“Sec. 5. Appraisal of Real Property. – All real property, whether taxable or exempt, shall be appraised at the current and fair market value prevailing in the locality where the property is situated.

Sec. 22. Valuation of Real Property. – Upon the discovery of real property or during the general revision of property assessments as provided in Section twenty-one of this Code or at any time when requested by the person in whose name the property is declared, the provincial or city assessor or his authorized deputy shall make an appraisal and assessment in accordance with Section five hereof of the real property listed and described in the declaration irrespective of any previous assessment or taxpayer’s valuation thereon: Provided, however, that the assessment of real property shall not be increased oftener than once every five years in the absence of new improvements increasing the value of said property or of any change in its use, except as otherwise provided in this Code.”

And the increase in the assessments of subject buildings from P403,143,760.00

under Tax Declaration No. C-126-02102-C to P538,649,920.00 under Tax

Declaration No. C-126-02103-C, is not a violation of Section 22 of P.D. 464

(supra) as alleged by Petitioner-Appellee, inasmuch as the increase in valuation

covers additional area of the buildings and auxiliary improvements introduced

thereon.

Reference: Book VII, pp. 113-128

To recapitulate, having declared, therefore, the Schedule of Base Unit

Construction Costs of Quezon City as null and void, and in the absence of an

approved Schedule of Market Values for Buildings, the buildings in question

owned by Petitioner-Appellee, shall be assessed at their current and fair market

values at the time of their construction in accordance with Sections 22, 5 and

24 of the Code.

WHEREFORE, premises considered, the decision of the Board of

Assessment Appeals of Quezon City declaring the Schedule of Base Unit

Construction Costs or Schedule of Market Values for all classes of buildings in

Quezon City as null and void is hereby AFFIRMED. However, its order directing

Respondent-Appellant to issue a new tax declaration base on the Schedule of

Market Values for buildings (1981-1984) prior to the Schedule of Market Values

of 1991, declared void by this Board is hereby MODIFIED, to the effect that

Respondent-Appellant City Assessor is hereby ordered to reassess subject

properties pursuant to Sections 5, 22 and 24 of PD 464 as amended.

SO ORDERED.

Manila, Philippines, December 29, 1994.

(Signed) MARGARITA G. MAGISTRADO
Chairman

(Signed) ELEANOR A. SANTOS
Member

(Signed) ALFONSO M. MEDADO
Member

Reference: Book VII, pp. 113-128