Republic of the Philippines

CENTRAL BOARD OF ASSESSMENT APPEALS 7th Floor, EDPC Building, BSP Complex Roxas Boulevard, Manila

RODOLFO R. BONIFACIO,
Petitioner-Appellant,

– versus –

THE LOCAL BOARD OF ASSESSMENT APPEALS OF MANDALUYONG CITY,
Appellee,

CBAA CASE NO. L-45

Re: LBAA Case No. 001 Mandaluyong City

– and –

THE CITY ASSESSOR AND THE CITY TREASURER OF MANDALUYONG.
Respondents-Appellees.
x – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – x

D E C I S I O N

This is an Appeal, filed on November 12, 2003 by Petitioner-Appellant

Rodolfo R. Bonifacio, from the Resolution of the Local Board of Assessment

Appeals of Mandaluyong City dated September 23, 2003 dismissing Petitioner’s

appeal filed therewith for alleged lack of jurisdiction.

Alleging that he, through counsel, received a copy of the aforementioned

Resolution on October 13, 2003, Petitioner-Appellant assigned the following

error:

THE LBAA SERIOUSLY ERRED AND ACTED WITH GRAVE ABUSE OF DISCRETION IN HOLDING THAT IT HAS NO JURISDICTION OVER THE APPEAL BELOW FOR THE CLAIM FOR REFUND/CREDIT OF REAL PROPERTY TAXES “FOUND TO BE ILLEGAL OR ERRONEOUS” AND FOR ACCORDINGLY DISMISSING THE SAID APPEAL.

The Antecedent Facts

1. Based on the 1994 Schedule of Market Values for real properties in

Mandaluyong City, Respondent City Assessor assessed Petitioner’s piece of

land located at EDSA, Bgy. Malamig, Mandaluyong, Metro Manila as

“commercial” land under Tax Declaration No. D-016-01221 and the building

erected thereon as “commercial” building under Tax Declaration No. D-016-

01222, both tax declarations to take effect the year 1994.

Reference: Book XII, pp. 118-134

2. Petitioner paid the City of Mandaluyong the total amount of

P1,055,063.74 as realty tax due from the year 1994 through the second quarter

of the year 2000.

3. On December 1, 1995, the Supreme Court, in Alejandro B. Ty, et al.

vs. The Hon. Aurelio C. Trampe, et al. (G.R. No. 117577), annulled the 1994

Schedule of Market Values fore real properties in Pasig City for being prepare

solely by the City Assessor of Pasig City, in violation of Sec. 9 of P.D. 921. All

motions for reconsideration filed therein were denied with finality by the Supreme

Court on January 16, 1996.

4. On December 22, 1997 the Court of Appeals rendered a decision in

Alberto S. Suguitan et al. vs. Hon. William Marcelino, et al. (CA-G.R. SP No.

44155)annulling the 1994 Schedule of Market Values for real properties in

Mandaluyong City, saying that “We find that the Decision in Ty vs. Trampe,

supra, which annulled the 1994 schedule of real property values in Pasig City,

applies as well to the schedule of market values for Mandaluyong City for the

same assessment period, inasmuch as both cities belong to the same Local

Treasury and Assessment District where there was no joint action by the

Assessors concerned.”

5. On February 28, 2000, the Supreme Court Resolution in Marcelino,

et al. vs. Alberto Suguita, et al. (G.R. No. 141412), denying the petition for review

on certiorari of the decision of the Court of Appeals in CA-G.R. SP No. 44155 for

having been filed late on February 18, 2000, due date being January 26, 2000,

counsel for petitioners having received a copy of the resolution denying

petitioners’ motion for reconsideration of the assailed decision on January 11,

2000; the Entry of Judgment stated that the Resolution became final and

executory on August 16, 2000.

6. Invoking the Court of Appeals decision on CA-G.R. SP No. 44155, in

a letter dated September 21, 2000, Petitioner-Appellant requested City Treasurer

Reference: Book XII, pp. 118-134

of Mandaluyong for refund of the amount of Php 438,951.74 representing

overpayment of realty taxes from 1994 to 2000.

7. On November 20, 2000 City Treasurer William Marcelino replied that

Mandaluyong City “have filed a motion for reconsideration of which final

adjudication was still pending as to how we would implement whether to make a

refund or a tax credit.”

8. On November 21, 2000 Petitioner reiterated his claim for refund,

requesting that the realty taxes due for the 3rd and 4th quarters of 2000 be

deducted from the amount claimed for refund.

9. On September 25, 2001 Petitioner requested that the amount he

claimed for refund be, instead, applied as tax credits for tax due from September,

2000 and onwards.

10. On June 17, 2002 the Acting City Legal Officer of Mandaluyong

advised Petitioner that, based on the decision in Ty vs. Trampe, “tax refunds/tax

credit is to be given only to those taxpayers who had filed a written claim for

refund from January 16, 1996 to January 16, 1998”.

11. In a letter dated July 15, 2002, Petitioner advised the Acting City

Legal Officer that the latter’s interpretation of the Court of Appeals Decision in

the “Suguitan” case was erroneous and that the two-year prescriptive period

commenced to run only on August 16, 2000 when the Supreme Court Resolution

in William Marcelino, et al. vs. Alberto S. Suguitan, et al. (G.R. No. 141412),

denying the petition for review on certiorari of the decision of the Court of

Appeals in CA-G.R. SP No. 44155, became final and executory.

12. In a reply dated July 22, 2002, the Acting City Legal Officer stated

that “our City government’s official position on the matter of tax refund/credit

espoused in our letter of June 17, 2002 is already final.”

13. On September 9, 2002 Petitioner filed his Appeal with the Local

Board of Assessment Appeals of Mandaluyong City.

The issues in the instant case may be summarized as follows:

Reference: Book XII, pp. 118-134

1. Whether or not jurisdiction over the instant case lies with the Local Board of

Assessment Appeals of Mandaluyong City, or with the regular courts;

2. Whether or not Petitioner-Appellant’s written claim for refund/credit for the

supposed overpayment of realty taxes was barred by prescription; and

3. Whether or not Petitioner-Appellant is entitled to such refund/credit.

Re: The First Issue:

Whether or not jurisdiction over the instant case lies with the Local Board of Assessment Appeals of Mandaluyong City, or with the regular courts.

Citing the case of Testate Estate of Concordia T. Lim vs. The City of

Manila (G.R. No. 90639, 21 February 1990), the Local Board of Assessment

Appeals of Mandaluyong City, in its Resolution of September 23, 2003 said:

“Therefore, much as this Board would like to provide relief to appellant if there was indeed overpayment of his property taxes, it could not arrogate unto itself the power which lawfully resides in the regular courts. The law is very clear on the matter. The power of this Board is merely limited to those protests filed by dissatisfied owners to question assessments made by local assessors. This remedy can be availed of within sixty (60) days after the notice of assessment was received by the taxpayer. When payment had already been made, as in the instant case, whether by mistake or under protest, jurisdiction lies with the regular courts.”

The above conclusion b y the Local Board is clearly based on the premise

that the circumstances present in the instant case are similar to those present in

the Estate of Concordia L. Lim case.

We do not agree. While in the instant case Petitioner-Appellant seeks the

refund of realty taxes assessed on the subject properties during the period when

Petitioner-Appellant was the owner and possessor of said properties, in the case

of the Testate Estate of Concordia T. Lim, the Estate sought the refund of realty

taxes assessed on certain properties during the periods when the Estate was

neither the owner nor the beneficial user thereof. The former case has everything

to do with the action of the City Assessor in assessing the subject properties on

the basis of a Schedule of Market Values which was nullified by a competent

court, the latter case had nothing to do with the assessment, but rather it dealt

with the question of who was liable for the tax. While the instant case deals with

Reference: Book XII, pp. 118-134

realty taxes paid before the collection thereof was declared illegal, the matter in

the Concordia Lim case was purely for the recovery of a sum of money.

Thus, in case of Testate Estate of Concordia T. Lim vs. The City of Manila,

supra, the Supreme Court said:

“However, the real estate taxes later assessed on the said properties for the years 1977, 1978, and the first quarter of 1979 were charged against the plaintiff-appellant even if the latter was not the beneficial user of the parcels of lands.

“xxx xxx xxx

“The Court rules that the plaintiff-appellant correctly filed the action for refund/reimbursement with the lower court as it is the courts which have jurisdiction to try cases involving the right to recover sums of money.

“xxx xxx xxx

“The facts of the case constrain us to rule that the plaintiff-appellant is not liable to pay the real property tax due for the years 1977, 1978 and first quarter of 1979. The clause in the Deed of Sale cannot be interpreted to include taxes for the periods prior to April 11, 1979, the date of repurchase.

“xxx xxx xxx

“To impose the real property tax on the estate which was neither the owner nor the beneficial user of the property during the designated periods would not only be contrary to law but also unjust. If plaintiff-appellant intended to assume the liability for realty taxes for the prior periods, the contract should have specifically stated “real estate taxes” due for the years 1977, 1978 and first quarter of 1979. The payments made by the plaintiff-appellant cannot be construed to be an admission of a tax liability since they were paid under protest and were done only in compliance with one of the requirements for the consummation of the sale as directed by the city Treasurer of Manila.”

The Supreme Court had the occasion to treat the same issue in Alejandro

B. Ty, et al. vs. The Hon. Aurelio C. Trampe, et al. (G.R. No. 117577, December

01, 1995), thus:

“. . . Although as a rule, administrative remedies must first be exhausted before resort to judicial action can prosper, there is a well-settled exception in cases where the controversy does not involve questions of fact but only on law. (Bagatsing vs. Ramirez, 74 SCRA 306 [1976]; Brett vs. LAC, 191 SCRA 687, 27 November 1990; Sunville Timber Products, Inc. vs. Alfonso G. Abad, 206 SCRA 482 [1992]; Corona vs. CA, 214 SCRA 378 [1992]; citing Quisumbing vs. Gumban, 193 SCRA 520 [1991]; Carino, et al. vs. Agricultural Credit and Cooperative Financing Administration, et al., 18 SCRA 183 [1996]; Rocamora vs. RTC – Cebu (Branch VIII), 167 SCRA 615 [1988]; Caltex Phils., Inc. vs. Palomar, L-19650, 29 September 1966, 18 SCRA 247)

“In laying down the powers of the Local Board of Assessment Appeals, R.A. 7160 provides in Sec. 229 (b) that ‘(t)he proceedings of the Board shall be conducted solely for the purpose of ascertaining the facts . . .’. It follows that appeals to this Board may be fruitful only where questions of fact are involved. Again, the protest contemplated under Sec. 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 assessment, he is required to ‘first pay the tax’

Reference: Book XII, pp. 118-134

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 on the very validity of any increase.

“Finally, it will be noted that in the consolidated case of Mathay/Javier/Puyat-Reyes cited earlier, the Supreme Court referred the petitions (which similarly questioned the schedules of market values prepared solely by the respective assessors in the local government units concerned) to the Board of Assessment Appeal, not for the latter to exercise its appellate jurisdiction, but rather to act only as a fact-finding commission. Said the Court thru Chief Justice Andres R. Narvasa:

“On November 5, 1991, the Court issued a Resolution clarifying its earlier one of May 16, 1991. It pointed out that the authority of the Central Board of Assessment Appeals ‘to take cognizance of the factual issues raised in these two case by virtue of the referral by this Court in the exercise of its extraordinary or certiorari jurisdiction should not be confused with its appellate jurisdiction over appealed assessment cases under Section 36 of P.D. 464 otherwise known as the Real Property Tax Code. The Board is not acting in its appellate jurisdiction in the instant cases, but rather, it is acting as a Court-appointed fact-finding commission to assist the Court in resolving the factual issues raised in G.R. Nos. 97618 and 97760.”

“In other words, the Court gave due course to the petitions therein in spite of the fact that the petitioners had not a priori, exhausted administrative remedies by filing an appeal before said Board. Because there were factual issues raised in the Mathay, et al. cases, the Supreme Court constituted the Central Board of Assessment Appeals as a fact-finding body to assist the Court in resolving said factual issues. Therefore, there is no reason to require petitioners to exhaust the administrative remedies provided in R.A. 7160, nor to mandate a referral by this Court to said Board.”

“xxx xxx xxx

“In view of the foregoing ruling, the question may be asked: what happens to real estate tax payments already made prior to its promulgation and finality? Under the law (Sec. 253 of R.A. 7160), a taxpayer may file a written claim for refund or credit for taxes and interests . . .”

Re: The Second Issue:

Whether or not Petitioner-Appellant’s written claim for refund/credit for the supposed overpayment of realty taxes was barred by prescription.

Petitioner-Appellant argues that the two-year period within which to file his

written claim for refund or credit, as provided under Sec. 253 of R.A. 7160,

should be reckoned from August 16, 2000 when the Supreme Court Resolution

in William Marcelino, et al. vs. Alberto S. Suguitan, et al. (G.R. No. 141412),

denying the petition for review on certiorari of the Court of Appeals’ decision

dated December 22, 1997 in CA-G.R. SP No. 44155 (Alberto S. Suguitan, et al.

vs. Hon. William Marcelino, et al.), became final and executory.

Reference: Book XII, pp. 118-134

On the other hand, Respondent-Appellee contend that, as declared by the

Court of Appeals in Suguitan vs. Marcelino, supra, the prescriptive period of two

(2) years should be reckoned from January 16, 1996 when the Supreme Court

denied with finality the motions for reconsideration filed in Ty vs. Trampe, supra.

The Supreme Court, in the above-entitled case, declared as null and void

the Schedule of Market Values for real properties in Pasig City for being

prepared solely by the Pasig City Assessor in violation of the provisions of Sec. 9

of P.D. 921.

Invoking the Supreme Court decision in Ty vs. Trampe, supra, appellant

Alberto S. Suguitan, through his counsel, wrote a letter dated March 14, 1996

addressed to appellee William Marcelino, requesting for the recomputation of the

real estate tax for the year 1995, and for the refund or any excess realty tax paid.

Appellant, Suguitan, who owns real property in Mandaluyong City, argued that

the ruling of the Supreme Court in Ty vs. Trampe also effectively nullified the

schedule of real property values for Mandaluyong City, since both Mandaluyong

City and Pasig City belong to the same Local Treasury and Assessment District,

specifically the Second District (Sec. 1, P.D. 921), and considering that his

request pertains to the same assessment period.

While finding that the Supreme Court Decision in the Ty vs. Trampe case,

which annulled the 1994 Schedule of Market Values for real properties in Pasig

City, applies as well to the schedule of market values for real properties in

Mandaluyong City, the Court of Appeals, in the Suguitan case, said:`

“Indeed, the provision applicable to this case is neither Section 226 nor Section 252, but Section 253 of the Local Government Code of 1991 (R.A. 7160), which provides:

‘SEC. 253. Repayment of Excessive Collections. – When an assessment of basic real property tax, or any other tax levied under this Title, is found to be illegal or erroneous and the tax is accordingly reduced or adjusted, the taxpayer may file a written claim for refund or credit for taxes and interests with the provincial or city treasurer within two (2) years from the date the taxpayer is entitled to such reduction or adjustment.’

“We agree with the appellants that the prescriptive period for the filing of a claim for refund or tax credit started to run only on the date of the decision in Ty vs. Trampe, supra, became final. On January 16, 1996, the

Reference: Book XII, pp. 118-134

Supreme Court denied with finality the motions for reconsideration filed in the said case. Thus, the letter-request or appellant Suguitan received by appellee Marcelino on March 15, 1996, was filed well within the two-year prescriptive period. Even if we were to consider the date of payment of the realty tax in question as the reckoning date (March 29, 1995), the appellant Suguitan’s claim for refund or tax credit would still be within the prescriptive period . . .

“WHEREFORE, the Order of the court a quo dated February 6, 1997 issued in SCA No. 1247 is hereby REVERSED. A writ of mandamus is hereby issued, commanding appellee William Marcelino as City Treasurer of Mandaluyong City to act on appellant Alberto S. Suguitan’s request for a refund of excess real estate taxes paid in 1995 and the succeeding years or for a tax credit, conformably with the Decision in ‘Alejandro B. Ty, et a. vs. Hon. Aurelio C. Trampe, et al.’ G.R. No. 117577 promulgated on December 1, 1995.”

By declaring that the prescriptive period of two (2) years within which Mr.

Alberto S. Suguitan may file, with the City Treasurer of Mandaluyong, his (Mr.

Suguitan’s) own written claim for refund or tax credit should be reckoned from

January 16, 1996, the date when the Supreme Court denied with finality all

motions for reconsideration filed in the Ty vs. Trampe case, the Court of Appeals

virtually decreed that Mr. Suguitan and, for that matter, the City of Mandaluyong

and all the real property taxpayers in that city were bound by the Supreme Court

Decision in the Ty vs. Trampe case.

This Board does not agree. The parties in the Ty vs. Trampe case are

entirely different from those in the Suguitan vs. Marcelino case. The case of Ty

vs. Trampe was not a proceeding in rem and nowhere in the Supreme Court’s

decision in that case is it mentioned that the schedule of market values for real

properties in Mandaluyong City was likewise declared null and void.

As correctly pointed out by respondents City Assessor and City Treasurer

on page three of their Position Paper dated July 2, 2003 and filed with the Local

Board of Assessment Appeals of Mandaluyong City on July 15, 2003, “the Ty vs.

Trampe case does not apply to the City of Mandaluyong since it is not a party to

the case . . .” The same respondents, however, made a complete turnaround by

embracing the pronouncement by the Court of Appeals in the Suguitan case that

the two-year prescriptive period should be reckoned from January 16, 1996.

Since the circumstances in both Suguitan vs. Marcelino and Ty vs. Trampe

cases were similar, the Court of Appeals, on the principle of stare decisis,

Reference: Book XII, pp. 118-134

applied the Supreme Court ruling in the Ty vs. Trampe case to the Suguitan

case. It remains, however, that the Suguitan case was and is a case separate

and distinct from the Ty vs. Trampe case.

Not satisfied with the Court of Appeals’ ruling in the Suguitan vs. Marcelino

case, William Marcelino, et al., went to the Supreme Court which, in the case

entitled “William Marcelino, et al., Petitioners, versus Alberto S. Suguitan, et al.,

Respondents, G.R. No. 141412, rendered a resolution on February 28, 2000, the

dispositive portion of which resolution reads as follows:

“Acting on the petition for review on certiorari of the decision dated December 22, 1997 of the Court of Appeals in CA-G.R. SP No. 44155, the Court Resolved to DENY the petition for having been filed late on February 18, 2000, due date being January 26, 2000, counsel for petitioners having received a copy of the resolution denying petitioners’ motion for reconsideration of the assailed decision on January 11, 2000.”

The Supreme Court’s Entry of Judgment states that the above-quoted

resolution had become final and executory on August 16, 2000. It is this date that

Petitioner-Appellant Rodolfo R. Bonifavio says that the two-year prescriptive

period (within which to file his written claim for refund or credit) should be

reckoned from.

As clearly stated in the above-quoted resolution of the Supreme Court, the

petition for review on certiorari was denied on a technicality, that is, for having

been filed late. With the same clarity, the same resolution also stated that the

due for filing of the same petition was January 26, 2000, which means that the

decision of the Court of Appeals in CA-G.R. SP No. 44155 became final and

executory the day after January 26, 2000, or on January 27, 2000. We believe,

therefore, that, as far as Petitioner-Appellant is concerned, the prescriptive

period of two (2) years should be reckoned from January 27, 2000.

The records show that the written claim for refund of Petitioner-Appellant

dated September 21, 2000 was received by the Office of the City Treasurer of

Mandaluyong on September 29, 2000. We believe, therefore, that the said

written claim was filed well within the two-year period prescribed under Sec. 253

of R.A. 7160.

Reference: Book XII, pp. 118-134

Re: The Third Issue:

Whether or not Petitioner-Appellant is entitled to such refund/credit.

Is Petitioner-Appellant entitled to his claim for refund or tax credit? No,

says Respondents-Appellees, citing the case of Belen C. Figueres vs. Court of

Appeals, et al. (G.R. No. 119172, March 25, 1999).

In that case, which was an appeal from the decision of the Court of

Appeals, dated February 8, 1995, dismissing a prohibition suit brought by

petitioner against respondent officials of the Municipality, now City, of

Mandaluyong to prevent them from enforcing the following ordinances:

1. Ordinance No. 119, series of 1993, promulgated on April 22, 1993, containing

the schedule of fair market values the different classes of real property in the municipality;

2. Ordinance No. 125, series of 1993, promulgated on November 11, 1993, fixing

the assessment levels applicable to such classes of real property; and

3. Ordinance No. 135, series of 1994, promulgated on February 24, 1994,

amending Ordinance No. 119 by providing that only one-third (1/3) of the increase in the market

values applicable to residential lands pursuant to the said ordinance shall be implemented in the

years 1994, 1995 and 1996.

Belen C. Figueres brought this prohibition suit on the ground that the

ordinances were invalid for having been adopted allegedly without public

hearings and prior publications or posting and without complying with the

implementing rules yet to be issued by the Department of Finance.

Petitioner Figueres was unable to substantiate the grounds of her petition

and on February 8, 1995, the Court of Appeals denied and dismissed the petition

for lack of merit.

On appeal before the Supreme Court, Petitioner Figueres contended that:

1. The Honorable Court of Appeals patently erred in finding lack of exhaustion of

administrative remedies on the part of herein petitioner when under the circumstances,

exhausting of administrative remedies is not required by lay and would have been a useless

formality.

Reference: Book XII, pp. 118-134

2. The Honorable Court of Appeals erred when it stated that the city council of

Mandaluyong is empowered to determine and approve the aforecited ordinances without taking

into account the mandatory public hearings required by R.A. 7160.

3. With due respect, the Honorable Court of Appeals patently erred in stating that

there is no need for publication of tax ordinances.

4. There is non compliance by public respondents of assessment regulation No. 1-

92 dated October 6, 1992, even if the Honorable Court of Appeals mentioned the existence of

the said assessment regulations.

On the subject of “exhaustion of administrative remedies”, the Supreme

Court said “. . . Therefore, the petitioner’s action in the Court of Appeals was

premature, and the appellate court correctly dismissed her action on the ground

that she failed to exhaust available administrative remedies. . .”

On the subject of “public hearings on tax ordinances”, the Supreme Court

said that “. . . Since petitioner failed to rebut the presumption of validity in favor of

the subject ordinances and to discharge the burden of proving that no public

hearings were conducted prior to the enactment thereof, we are constrained to

uphold their constitutionality or legality. . . Thus, considering the presumption of

validity in favor of the ordinance and the failure of petitioner to rebut such

presumptions, we are constrained to dismiss the petition in this case.”

On “compliance with regulations issued by the Department of Finance,” the

Supreme Court said:

“Also without merit is the contention of petitioner that Ordinance No. 119 and Ordinance No. 135 are void for not having been enacted in accordance with Local Government Regulation No. 1-92, dated October 6, 1992, of the Department of Finance, which provides guidelines for the preparation of proposed schedules of fair market values of the different classes of real property in a local government unit, such as time tables for obtaining information from owners of affected lands and buildings regarding the value thereof. As in the case of the procedural requirements for the enactment of tax ordinances and revenue measures, however, petitioner has not shown that the ordinances in this case were not enacted in accordance with the applicable regulations of the Department of Finance.”

From the above, it is very clear that the issues in the Figueres case are

entirely different from that involved in the Suguitan case and, for that matter, the

Ty vs. Trampe case. In the Figueres case, Ordinance Nos. 119, 125 and 135

were presumed valid for failure of Figueres to prove her allegations. In the

Reference: Book XII, pp. 118-134

Suguitan case, the schedule of fair market values of the different classes of real

property in Mandaluyong, which was the subject of Ordinance No. 199, was

declared illegal for being prepared in violation of Sec. 9 of P.D. 921.

In his letter of September 21, 2000 Petitioner-Appellant claimed for the

refund of the amount of Php 438,951.74. This amount represents payments of

realty taxes from 1994 to 2000 on the increase in assessments as a result of the

1994 Schedule of Market Values for real properties in Mandaluyong City.

Petitioner’s said letter actually contained an itemized list of taxes he paid for

realty taxes for 1994-2000 with a total of Php 1,055,063.74. Of this total amount,

Php 616,112.00 were for taxes due on assessments before the increase, and the

remaining Php 438,951.74 were for taxes on the increase in assessments.

Respondents-Appellees do not dispute the above computations.

Since the Petitioner-Appellant’s written claim for refund was filed well

within the two-year period from January 27, 2000, the date when the Court of

Appeals decision in CA-G.R. SP No. 44155 (declaring the 1994 Schedule of

Market Values for real properties in Mandaluyong City as null and void) became

final and executory, Respondent City Treasurer of Mandaluyong should now

refund the said sum of Php 438,951.74 to Petitioner-Appellant or issue unto him

a tax credit, in the same amount, to be applied to present and/or future taxes

which may be rightfully due from Petitioner-Appellant, all in accordance with the

provisions of Sec. 253 of R.A. 7160, thus:

“SEC. 253. Repayment of Excessive Collection. – Where an assessment of basic real property tax, or any other tax levied under this Title, is found to be illegal or erroneous and the tax is accordingly reduced or adjusted, the taxpayer may file a written claim for refund or credit for taxes and interests with the provincial or city treasurer within two (2) years from the date the taxpayer is entitled to such reduction or adjustment.

“The provincial or city treasurer shall decide the claim for tax refund or tax credit within sixty (60) days from receipt thereof. In case the claim for tax refund or credit is denied, the taxpayer may avail of the remedies as provided for in Chapter 3, Title Two, Book II of this Code.”

A question may be asked: what if Respondent City Treasurer refused to

refund or issue a tax credit to Petitioner-Appellant?

Reference: Book XII, pp. 118-134

The second paragraph of Sec. 253 of R.A. 7160, above-quoted, provides

the answer. The only remedy available to the aggrieved taxpayer found in

Chapter 3, Title Two, Book II of the Local Government Code of 1991 is an appeal

to the Local Board of Assessment Appeals as provided for in Sec. 226 thereof,

which reads:

“SEC. 226. Local Board of Assessment Appeals. – Any owner or person having legal interest in the property who is not satisfied with the action of the provincial, city or municipal assessor in the assessment of his property may, within sixty (60) days from the date of receipt of the written notice of assessment, appeal to the Board of Assessment Appeals of the province or city by filing a petition under oath in the form prescribed for the purpose, together with copies of the tax declaration and such affidavits or documents submitted in support of the appeal.”

The appeal under Sec. 226, however, to the Local Board of Assessment

Appeals must be filed within sixty (60) days from receipt of the written notice of

the disputed assessment. Taken literally, the wordings of Sec. 226 would render

the last sentence of the second paragraph of Sec. 253 ineffective. We do not

believe the legislature intended this situation. We must, therefore, harmonize the

two apparently conflicting provisions of R.A. 7160.

Section 226 speaks of an assessment which the taxpayer disputed before

he paid any tax thereon or, it he did pay, such payment was made under protest.

The instant case deals with an assessment which the taxpayer thought was valid

when he paid the tax thereon. His right to claim for refund or credit, as provided

for under Sec. 253, stemmed from the fact that the assessment was

subsequently declared invalid for being based on an illegal schedule of market

values. The cause of action by a taxpayer under the provisions of Sec. 226 is the

unsatisfactory “action of the provincial, city or municipal assessor in the

assessment of his property”, while his cause of action under the provisions of

Sec. 253 is “the refusal by the provincial or city treasurer to refund or credit the

taxes paid on the increase in assessment which was subsequently declared by a

competent court as invalid.

In the instant case, therefore, Petitioner-Appellant did not ask the Local

Board of Assessment Appeals of Mandaluyong City to declare the 1994

Reference: Book XII, pp. 118-134

Schedule of Market Values for real properties in Mandaluyong City as null and

void. This task had already been done by the Court of Appeals in CA-G.R. SP

No. 44155. Rather, the Petitioner was asking the Local Board to order the City

Treasurer of Mandaluyong to refund or credit to Petitioner the realty taxes the

latter paid on the increase in assessment which declared invalid for being based

on an illegal schedule of market values.

WHEREFORE, premises considered, the Resolution promulgated by the

Local Board of Assessment Appeals of the City of Mandaluyong on September

23, 2003 is hereby SET ASIDE. Respondent City Treasurer of Mandaluyong is

hereby ORDERED to refund the said sum of Php 438,951.74 to Petitioner-

Appellant as overpayment of real property taxes from 1994 to 2000, or issue unto

him a tax credit in the same amount to be applied to present and/or future realty

taxes which may be rightfully due from Petitioner-Appellant, all in accordance

with the provisions of Sec. 253 of R.A. 7160.

SO ORDERED.

Manila, Philippines, June 7, 2005.

(Signed) CESAR S. GUTIERREZ
Chairman

(Signed)
ANGEL P. PALOMARES Member

(Signed) RAFAEL O. CORTES
Member

Reference: Book XII, pp. 118-134