Republic of the Philippines
M a n i l a

– versus – (LBAA Case No. 98-1) Province of Bataan

– and –

PASTOR P. VICHUACO, Provincial Treasurer Province of Bataan, HERMENEGILDO C. PILAPIL, Provincial Assessor, Province of Bataan and RODOLFO C. GOMEZ, Municipal Assessor, Limay, Bataan,


This resolves the appeal instituted by petitioner-appellant National Power in connection with the Resolution of the respondent LBAA dated May 22, 2000, the dispositive portion of which reads:
“Wherefore, the instant petition is hereby ordered DISMISSED, for having been filed out of time and for lack of merit.”

Petitioner-appellant came to Us questioning the propriety of the Honorable Board’s Resolution. More particularly, appellant raised the following assigned errors:
I. The Local Board erred in holding that the petition was filed out of time; and
II. The Local Board erred in holding that the Respondent-Appellees’ assessment is in accordance with the facts and law.

The background facts as stated in petitioner-appellant’s appeal are the following:
On October 21, 1996, appellant NPC received a Notice from respondent Gomez, Municipal Assessor of Limay, Bataan, regarding a revision of the real property tax assessment made on petitioner-appellant’s machineries, buildings and other improvements (Block A & B) at its Bataan Combined Cycle Power Plant (BCCPP, for short) in Limay, Bataan (Annex B). Also attached in said letter are copies of Tax Declaration Nos. 13137, 13138, 13139 and 13140 (Annexes B-1; B-2; B-3; and B-4). Respondent Municipal Assessor’s letter was also accompanied by a copy of the Real Property Tax Order of Payment assessing the subject properties at the market value of:

Block A – P1,500,000,000.00; and
Block B – P3,000,000,000.00
On October 23, 1996, petitioner-appellant, thru Mr. Antonio O. Nerona of Metro Manila Regional Office, wrote a letter to respondent Municipal Assessor informing the latter that in petitioner-appellant’s Sworn Declaration submitted to the office of respondent Provincial Treasurer, the value of the subject properties is lower than those reflected in the aforesaid tax declarations. Appellant NPC also asked respondent Municipal Assessor to consider petitioner-appellant’s sworn declaration in respondents-appellees’ assessment.

Respondent Municipal Assessor replied and requested a meeting with petitioner-appellant’s counsel.

Meanwhile, on November 8, 1996, petitioner-appellant paid “under protest” a portion of the subject real property tax in the amount of P8,160,000.00 to respondent Provincial Treasurer . The balance of P12,213,114.90 was also paid “under protest” on November 11, 1996.

On November 15, 1996, petitioner-appellant formally filed its protest and requested that respondents-appellees assessment be corrected and the excess payment be refunded or credited in its favor.

Thereafter, series of meetings and discussions were held between petitioner-appellant and respondents Municipal Assessor, Provincial Assessor and Provincial Treasurer. On January 13, 1997, petitioner-appellant furnished respondent Municipal Assessor additional supporting documents for its protest.

On November 6, 1997, petitioner-appellant paid “under protest” the amount of P6,000,000.00 for the 1997 real property tax on the subject property.

Respondent Provincial Treasurer failed to act on petitioner-appellant’s protest. Hence, petitioner-appellant filed a Petition with the LBAA of Bataan on April 14, 1998.

During the pendency of the case before the LBAA of Bataan, petitioner-appellant religiously paid “under protest” the real property tax of the subject real properties as follows:

For 1997 – P6,000,000.00 – 11-6-97

For 1998 – P33,459.74 – 3-31-98
1st quarter of 1998 – P1,350,000.00 – 3-31-98
2nd quarter of 1998 – P1,350,000.00 – 11-20-98
3rd quarter of 1998 – P1,500,000.00 – 11-27-98
4th quarter of 1998 – P1,350,000.00 – 12-9-98
For the year 1999 – P4,553,106,38 – 3-31-99

During the hearing, respondent LBAA required petitioner-appellant to submit its books to support its allegation that the assessment was excessive and erroneous. Respondents Municipal Assessor and Provincial Assessor filed their Comment thereto. An ocular inspection was also conducted.

On October 12, 1999, with the approval of the LBAA, it was agreed that respondents Provincial and Municipal Assessors, shall submit within fifteen (15) days from said date a revised assessment on the real property tax of petitioner-appellant’s property. Respondents-appellees failed to comply with this agreement.

For the year 2000, respondents-appellees issued another assessment which maintained its assessment for petitioner-appellant’s real property subject matter of this case, without considering depreciation costs and remaining economic life of the improvements and machineries therein.

On May 22, 2000, appellee Local Board issued the assailed Resolution, which dismissed its Petition for having been filed out of time and for lack of merit.

Hence, the instant appeal.
Prescription, being a jurisdictional issue, stood to be disposed of first before proceeding with the case on the merit. Appellee Local Board ruled that said Petition was filed out of time. It held that the two (2) remedies viz, Sections 226 and 252 of R.A. 7160 “are not at all independent of each other” so that as prescription accrued under Section 226 it also accrued under Section 252.

Hearings were held before this Board and on September 17, 2003, it issued a Resolution which determined whether or not Sections 226 and 252 of the Local Government Code of 1991 (R.A. 7160) are separate and distinct modes of appeal before the Local Board of Assessment Appeals and resolved the issue of whether the LBAA of Bataan erred in dismissing appellant’s Petition for having been filed out of time.
It ruled:
“Wherefore, the Resolution of the Local Board of Assessment Appeals of the Province of Bataan pertaining to its Order of Dismissal of the appeal therein by the National Power Corporation, Petitioner-Appellant, for having been filed, not in accordance with the provisions of the Local Government Code of 1991 (R.A. 7160) and therefore (filed) out of time is hereby set aside. The Appeal filed pursuant to Sec. 252 of R.A. 7160 is hereby upheld. Hearing of the case on the merits will be on October 7, 2003, the parties are hereby ordered to act accordingly.


This Board’s finding is as follows:
“Herein Petitioner-Appellant questioned the excessiveness of the assessment and the amount of tax imposed on its properties. Hence Petitioner-Appellant is entitled to Appeal before the Local Board of Assessment Appeals under Sec. 252 of R.A. 7160, after having ‘paid under protest’ the corresponding taxes thereto.

Petitioner-Appellant’s contention however is that Sec. 252 did not provide for a period when the taxpayer can avail of the provisions of Sec. 226 (referred to as Chapter 3, Title Two, Book II of the Local Government Code of 1991), in the event the provincial treasurer fails to act on the protest. The period could easily be deduced from the context of Sec. 252, i.e., sixty (60) days from receipt by Petitioner of the denial by the treasurer of the protest or upon the lapse of the sixty (60) day period prescribed therein.

The Court of Appeals in that case of Central Azucarera de Bais vs. Local Board of Assessment Appeals and City Assessor of Bais City (supra) justifiably determined the start of the sixty (60) day period within which to Appeal to the LBAA, and that is, from final action of the provincial, city, or municipal assessor concerned.

The Supreme Court delineated the instances when the taxpayer could avail of the provisions of Sections 226 and 252 of R.A. 7160, in filing an Appeal before the LBAA, in the case of Lopez vs. City of Manila (supra). In that context therefore, this Board finds that Sec. 252 can stand, not in combination or tandem with Sec. 226, as Respondents-Appellees would have it, but by itself. The law provided nothing that would translate, in unequivocal terms their inseparability as to constitute them into a single mode of Appeal. The reference to Chapter 3, Title Two, Book II of R.A. 7160 (supra), which is Sec. 226 thereof is merely adoptive of form but not of essence. Indeed Sections 226 and 252 are separate and distinct modes of Appeal.”

The issue of prescription, which is one of the two (2) errors raised by petitioner-appellant in its appeal before Us, the other being that “(t)he Local Board erred in holding that Respondents-Appellees’ assessment is in accordance with facts and law”, is of no moment albeit this Board has already dealt with it when it passed upon the issue of prescription whereby Petitioner-Appellant appealed, not under Section 226 of R.A. 7160, as obviously it is already barred by time, but under Section 252 of R.A. 7160.

Hence, “under Section 252 it is the payment of the tax that is under protest, not the assessment of the property.” Appeal under Section 226 has already prescribed. Petitioner-Appellant, however, is appealing under Section 252 which can still be very much availed of.

In other words, Petitioner-Appellant can no longer question the assessment made on its property by the assessor concerned. However it can question the treasurer, not on the assessment but on the implementation thereof.

During the course of the proceedings, this Board encouraged the parties to enter into an amicable settlement pursuant to the Alternative Dispute Resolution under R.A. 9285 “AN ACT TO INSTITUTIONALIZE THE USE OF AN ALTERNATIVE DISPUTE RESOLUTION SYSTEM IN THE PHILIPPINES AND TO ESTABLISH THE OFFICE FOR ALTERNATIVE DISPUTE RESOLUTION, AND FOR OTHER PURPOSES” and E.O. 523 the establishment and use of alternative dispute resolution mechanism in every agency under the executive department.

The parties made considerable and lengthy negotiations for a compromise agreement, but they were not able to succeed.

Ocular inspection was conducted by the Board on petitioner-appellant’s premises on May 15, 2008.

Petitioner-Appellant’s ARGUMENTS/DISCUSSIONS

The respondent LBAA in its Resolution dated May 22, 2000, denying the correct assessment, held that:
“Even assuming that the Petition is not barred by prescription, still the Board is not inclined to grant it on the merits thereof.

xxx xxx xxx

As further stated by the respondent in his Comment dated June 11, 1998, his aforesaid request was not heeded. The LGU therefore was within its right when it prepared the assessment. On the other hand, the petitioner, by virtue of its failure to comply with its duty, has lost its right to complain that its own valuation was not taken into consideration. “

Petitioner-appellant alleges that it is not questioning the authority of respondents-appellees to issue the aforesaid assessment. In fact, it recognizes the same. However, the exercise of said authority and power is not without limitation. This delegated authority should not be abused and should be within the limits set by law.

Petitioner-appellant points out that respondents-appellees assessed the fair market value of the subject real property at P1,500,000,000.00 for Block A and P1,500,000,000.00 for Block B or a total of P3,000,000,000.00 annually. Petitioner-appellant asserts that the unilateral declaration of the fair market value of the subject properties is a grave abuse of authority adding to this the fact that the assessments were excessive, erroneous, unwarranted, whimsical, arbitrary, inequitable and confiscatory.

Petitioner-appellant further argued that in support of its claim, it submitted audited financial statement duly certified by the Commission on Audit, Sworn Declaration of the value of the subject property, its itemized fixed assets report and the independent appraisal report conducted by a third party. Additionally, respondents-appellees never gave the basis on how they arrived at their assessed value. Respondents-appellees never submitted any basis to substantiate their allegation that P3 billion is the fair market value of the subject real properties.

Further, petitioner-appellant, in its appeal, tried to show that respondents-appellees valuation is without basis and is fantastically excessive. One proof that the valuation is excessive is the absence of any basis of their assessment. This omission clearly shows the arbitrariness of the assessment and valuation of the subject properties.

Also, it stressed that the first fundamental principle to guide the appraisal and assessment of real property for taxation purposes is that the property must be appraised at its current and fair market value. For having failed to assess the “fair market value” of subject properties, respondents-appellees committed grave abuse of discretion.

Petitioner-appellant then prays:
1) That the Resolution of respondent LBAA of Bataan be set aside;
2) That the valuation and assessment of the subject properties be declared null and void for lack of basis;
3) That respondents-appellees be ordered to revise the assessment accordingly taken into account the declaration of petitioner-appellant of the properties’ true value which is P781.7 Million as reflected in petitioner-appellant’s Sworn Statement dated Jan. 16, 1996; and
4) Respondents-appellees be ordered to refund the excess payment to petitioner-appellant.

Respondents-Appellees’ COMMENT/OPPOSITION

Respondents-appellees argue that the Resolution of this Board dated September 17, 2003 declared that the present appeal is one filed pursuant to Section 252 of R.A. 7160. Hence, it is the payment of the tax that is under protest, and not the assessment of the property that is to be resolved in this appeal.

Respondents-appellees emphasize that an appeal under Section 252 necessarily precludes any question regarding the assessment because it presupposes that the taxpayer is “satisfied or in agreement with the assessment of his property but finds the tax imposed excessive or unjust”.

Respondents-appellees point out that petitioner-appellant did not move for a reconsideration of the Board’s above Resolution. As a legal consequence, the said ruling has become final and conclusive. Petitioner-appellant is, therefore, effectively barred from questioning the assessment of the subject properties. As such, the evidence that it presented, both testimonial and documentary, should be rejected especially so as timely objections had been interposed. Having adduced no evidence at all to support, prove and substantiate an appeal under Section 252, petitioner-appellant’s cause must necessarily fail.

It is, therefore, the conclusion of respondents-appellees that petitioner-appellant has not submitted a single piece of evidence to prove any of the grounds for an appeal under Section 252 of R.A. 7160. What petitioner-appellant had presented is evidence disputing the assessment of the subject properties which is no longer the subject of the present appeal. Respondents-appellees then pray that the instant appeal be dismissed.

Be that as it may. On February 15, 2000 Respondent-Appellee Municipal Assessor issued a Real Property Tax Order of Payment like what he did on October 21, 1996 on the same property and on the same assessment. Said Property Tax Order of Payment is nothing more than the standard operating procedure followed by said Respondent-Appellee. It is worded as follows:
This is to inform you that the real property tax(es) payable for the year 2000 on the property/properties located in this province/municipality and ownership stated in your name for taxation purposes as well for subsequent years until you are informed of any change(s) is/are as follows: x x x.”

Petitioner-Appellant however, preferred to file an appeal thereto, which the LBAA of Bataan dismissed for lack of cause of action, hence elevated before this Board and docketed as CBAA Case No. L-26-A. The facts, in gist, are as follows:
“On February 15, 2000, petitioner-appellant received the Real Property Tax Order of Payment dated February 14, 2000 issued by respondent-appellee Rodolfo C. Gomez (respondent-appellee Gomez, for brevity) with the assessment on petitioner’s real properties, machineries, buildings and other improvements at Limay, Bataan. The assessment includes among others, the real properties of petitioner-appellant at its Bataan Combined Cycle Power Plant (BCCPP, for short) in Limay, Bataan. Significantly, respondent-appellee Gomez assessed the real properties (Block A and B) at BCCPP at the market value of P1.500.000.000.00 for Block A and another P1,500,000,000.00 for Block B for a total amount of P3,000,000,000.00.”

In the hearing of August 10, 2004, Petitioner-Appellant manifested that it filed a case docketed as CBAA Case No. L-26-A wherein “the Parties are practically the same, the issues are practically the same” and moved for its consolidation “with this instant case that we are hearing right now, CBAA Case No. L-26.” Therefore pursuant thereto, and the nature and exigency thereof, herein CBAA Cases Nos. L-26 and L-26-A are deemed consolidated.


This Board is in full accord with Respondents-Appellees’ view that Petitioner-Appellant is “effectively barred from questioning the assessment of the subject properties.”

In the case of Ty vs. Trampe (500 SCRA 519) the Supreme Court said:
“X x x, the protest contemplated under Section 252 of R.A. 7160 is needed where there is a question as to the reasonableness of the amount assessed. Hence, if a taxpayer disputes the reasonableness of an increase in a real estate tax assessment, he is required to ‘first pay the tax’ under protest. Otherwise, the city or municipal treasurer will not act on his protest. In the case at bench however, the petitioners are questioning the very authority and power of the assessor, acting solely and independently, to impose the assessment and of the treasurer to collect the tax. These are not questions merely of amounts of the increase in the tax but attacks the very validity of any increase.”

The herein appeal is against the action of the treasurer, not against the action of the assessor. Petitioner-Appellant before this Board, however, did not adduce evidence against the action of the treasurer. Instead it proceeded against the action of the assessor which is not under appeal. Parenthetically, Petitioner-Appellant can no longer appeal the assessment made by the assessor as it is already barred by time.

This Board is therefore constrained to dismiss the herein appeal for lack of merit. However, since there are accrued depreciations on the property, the treasurer concerned is hereby ordered to take full consideration thereof for Petitioner-Appellant.


Manila, Philippines, May 17, 2012.


Member Member

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