Republic of the Philippines
CENTRAL BOARD OF ASSESSMENT APPEALS M a n i l a
FIRST GAS POWER CORPORATION, Petitioner-Appellant,
CBAA CASE NO. L – 67 -versus-
OFFICE OF THE PROVINCIAL
OF BATANGAS and MRS. AURORA
CRISTETA A. CASTOR, in her capacity as Provincial Assessor of Batangas,
LOCAL BOARD OF ASSESSMENT APPEALS OF BATANGAS PROVINCE,
R E S O L U T I O N
In this Appeal, First Gas Power Corporation, Petitioner-Appellant,
questions the Order of the Local Board of Assessment Appeals of the Province
of Batangas (LBAA of Batangas) for “a certification from the Provincial
Treasurer and a photocopy of the receipts with the duly annotated ‘paid under
protest’ within Fifteen (15) days upon receipt of this order and failure to do so
will tantamount (sic) to the dismissal of the petition”. The LBAA of Batangas
construed to have adopted the doctrine in Jaime Lopez vs. City of Manila
(infra), hence it deemed that “the provisions in Section 231 of the same code
was further enhanced Section 252”(sic).
The questioned Order is hereby reproduced as follows:
“During the clarificatory hearing held last August 31, 2005, the Respondents through counsel, insists that payment under protest is jurisdictional and therefore this board should not entertain the petition and eventually order the petitioner to pay under protest before it can further entertain the issues being raised by the petitioner.
This Board after evaluating the pleading of both parties who had brilliantly discussed their respective positions, is convinced that the Petitioner be made to pay the taxes under protest before it can entertain the petition.
This Board, adopting the doctrine laid down in the Jaime Lopez vs. City of Manila, G.R. 127139, promulgated on February 19, 1999, that should the Taxpayer question the excessiveness of the amount of tax, he must first pay the amount due, in accordance with Section 252 of R.A. 7160. Then, he must request the annotation of the phrase ‘paid under protest’ and accordingly appeal to the Board of Assessment Appeals by filing a petition under oath together with copies of the tax declaration and affidavits or documents to support his appeal.
Inasmuch as the provisions of Section 252 of RA 7160, explicitly show that the language of the law is pure and simple. The provisions did not mention whether the issue raised is on exemption from the payment of realty taxes as assessed by the Provincial Assessor on their properties or the issue on excessiveness and unreasonableness of the assessment. It follows that this Board is therefore, not in a position to qualify and made (sic) such distinction.
As this Board adopted the doctrine laid down in the above-mentioned case, the provisions in Section 231 of the same Code, was further enhanced in Section 252 (sic).
Section 231 is quoted hereunder:
‘Sec. 231. Effect of Appeal on the Payment of Real Property Tax. – Appeal on assessment of real property made under the provisions of this Code shall, in no case, suspend the collection of the corresponding realty taxes on the property involved as assessed by the provincial or city assessor, without prejudice to subsequent adjustment depending upon the final outcome of the appeal,” (Underlining Provided.)
This Board now orders Petitioner to furnish this Board a certification from the Provincial Treasurer and a photocopy of the receipt with the duly annotated ‘paid under protest’ within Fifteen (15) days upon receipt of this order, and failure to do so will tantamount (sic) to the dismissal of the petition.”
Petitioner-Appellant assigned the following errors:
WITH DUE RESPECT, THE APPELLEE ERRED IN RULING THAT ‘PAYMENT UNDER PROTEST’ IS A JURISDICTIONAL REQUIREMENT IN DIRECT APPEAL TO THE LBAA UNDER SECTION 226 OF THE LOCAL GOVERNMENT CODE.
WITH ESTEEMED REGARD, THE APPELLEE ERRED IN GIVING DUE COURSE TO RESPONDENTS-APPELLEES’S MOTION TO DISMISS AND IN NOT RULING ON THE MERITS OF PETITIONER-APPELLANT’S MOTION.
On The First Assignment of Error, Petitioner-Appellant avers: ‘PAYMENT
UNDER PROTEST’ IS NOT A JURISDICTIONAL REQUIREMENT IN DIRECT
APPEAL TO THE LBAA UNDER SECTION 226 OF THE LOCAL
GOVERNMENT CODE’. Among others, Petitioner-Appellant alleges the
1. “(T)he Appellee erred when it changed its previous position and subsequently ruled that under Section 252 of the Local Government Code Petitioner-Appellant must first pay the questioned real property tax under protest before the Appellee can entertain Petitioner-Appellant’s Petition, which it filed pursuant to Section 226 of the Local Government Code”.
2. “(T)he remedy that is available in filing the Petition before the Appellee is the Direct Appeal to the LBAA under Section 226 of the Local Government Code. Unlike in the remedy of Protest to the Local treasurer under Section 252 of the Local Government code, ‘payment under protest’ is not a jurisdictional requirement on the remedy of Direct Appeal to the LBAA under Section 226 of the Local Government Code”.
3. “Section 252 of the Local Government Code clearly refers to the separate remedy of Protest to the local treasurer”.
4. “On the other hand, Section 226 of the Local Government Code provides for the separate and distinct remedy of Direct Appeal to the LBAA”.
5. “(T)he remedy of Direct Appeal under Section 226 only requires the filing by the unsatisfied owner or person having legal interest in the property a Petition under oath, together with the tax declarations and other documentary evidence, against the action of the assessor. There is absolutely no requirement of a prior payment of tax under protest before the owner or person having legal interest in the property can file a Petition before the LBAA”.
6. “(T)he remedies of Direct Appeal and Protest are separate and distinct from each other”.
7. “Each remedy is filed before separate and distinct entities- the LBAA for Direct Appeal and the Local treasurer for Protest.”
8. “The availability of each remedy is triggered by entirely unrelated events- the local assessor’s issuance of the notice of assessment in Direct Appeal and the Local treasurer’s collection of the tax and the taxpayer’s payment thereof in Protest”.
9. “It is therefore incorrect to apply the requirements of the remedy of Protest on Direct Appeal, and vice-versa. Obviously, the payment under protest of the tax, while a jurisdictional requirement in the remedy of Protest to the local treasurer, is not required in the remedy of Direct Appeal to the LBAA”.
10. “On the contrary, the Lopez case clearly showed that prior payment is only required for the remedy of Protest to the local treasurer under Section 252 and not for the remedy of Direct Appeal to the LBAA under Section 226”.
11. “Section 231 addresses the situation when there is already an appeal filed before the LBAA and the local treasurer has not yet collected the disputed real property tax. However, there is absolutely no statement therein making the payment of the questioned real property tax a jurisdictional requirement before the LBAA can assume jurisdiction of the
appeal. Thus, if the local treasurer does not proceed with his collection of the questioned real property tax, the LBAA can proceed with its adjudication of the appeal without the need to require payment under protest from the taxpayer”.
12. “In the case entitled ‘First Gas Power Corporation -versus- the Province of Batangas, et al.’ and docketed as SCA Case No. 7730, the Batangas RTC issued an Order and a Writ of Preliminary Injunction both dated 14 July 2005 enjoining the collection of the disputed real property tax pending the final resolution of the Direct Appeal of Petitioner-Appellant. The pertinent portions of the Batangas RTC’s Order read:
‘Appeal to the LBAA was made but it failed to provide the adequate legal remedy. The appeal remains unresolved up to the present.
Looking back, the appeal of the petitioner with the LBAA was filed on August 3, 2003, but for one reason or another, the appeal has not been resolved despite its mandate to decide the appeal within 120 days from its filing (Section 229, Chapter 3, Title Two, Book II of the LGC). Elsewise stated, under the circumstances obtaining in this case, while appeal to the LBAA is theoretically an adequate legal remedy, in reality it was not so. The inaction of the LBAA has effectively prevented the petitioner from pursuing, if necessary, remedies with higher administrative agency. And in the meanwhile, the petitioner is threatened with the coercive process of distraint and levy of property’. (Underscoring supplied.)”.
In Opposition thereto, Respondents-Appellees “set forth the following
1. “THE ASSAILED ORDER IS MERELY INTERLOCUTORY AND THEREFORE NOT APPEALABLE. THE APPEAL IS IMPROPER, OR PREMATURE, TO SAY THE LEAST”.
2. “THE FORMAL DISMISSAL OF THE APPEAL AT THE LBAA IS IMPERATIVE AS IT WOULD MEAN THAT THE APPEAL IS CONSIDERED ‘NOT FILED’ AT ALL”.
3. “ASSUMING ARGUENDO – BUT WITHOUT ACCEPTING – THAT THE ASSAILED ORDER IS A ‘FINAL’ ONE, THE ONLY ISSUE TO BE RESOLVED IS WHETHER OR NOT ‘PRIOR PAYMENT’ IS A JURISDICTIONAL PREREQUISITE IN APPEALS BEFORE THE LBAA”.
4. THE LBAA HAS ALREADY RULED THAT ‘PRIOR PAYMENT’ IS A JURISDICTIONAL REQUIREMENT BEFORE THE APPEAL MAY BE GIVEN DUE COURSE, HENCE, WITHOUT ‘PRIOR PAYMENT’, THERE IS NO APPEAL TO SPEAK OR”.
On the Interlocutory Order, Respondents-Appellees introduced the
“The term ‘final order’ is used in two senses depending on whether it is used on the issue of appealability or on the issue of binding effect. For purposes of appeal, an order is ‘final’ if it disposes of the action, as distinguished from an interlocutory order which leaves something to be done in the trail court with
respect to the merits of the case (De la Cruz, et al. vs. Paras, et al., L-41053, Feb. 27, 1976). x x x [I, Regalado, Remedial Law Compendium, p.406, 8th Rev Ed (2002), emphasis and underscoring supplied]”.
On the Imperativeness of the Formal Dismissal of the Appeal at the
LBAA, Respondents-Appellees asserts that “it is only after such dismissal that
the case may be properly elevated to this honorable Board” otherwise “the
appeal is deemed ‘not filed’ and “there is nothing to bring to the next higher
Respondents-Appellees touched on “Real Property Taxation (Book II)” by
Atty. Florecita P. Flores and Antonio A. Avila Jr., about CBAA Resolution (Case
No. 10) “where the Central Board of Assessment Appeals (CBAA) interpreted
Section 231 of LGC and felicitously held that ‘Petitioner-Appellant MECO
should pay the realty taxes as assessed by the Provincial Assessor before the
Board may proceed with the hearing of this case.’” This case was decided on
June 6, 1975. Parenthitically, Respondents-Appellees admit that “although the
same does not have the force of a jurisprudence, it is no less an authoritative
opinion of this Honorable Board”.
In digest of the above-MECO case notably showed the following: (a)
Section 54 of Commonwealth Act. No. 470 provides that “the taxpayer shall
have paid, under protest, the taxes assessed against him” before any suit
assailing the validity of a tax assessed shall be entertained by the court; (b) that
“the appeals to the Court of Tax Appeals were governed by Republic Act. No
1125 (specifically Section 11) and the finding that ‘Section 11 does not require
that before an appeal from the decision of the Board of Assessment Appeals
can be brought to the Court of Tax Appeals it must first be shown that the party
disputing the assessment had paid under protest the realty tax being
assessed’”; (c) that the present appeal is filed under and pursuant to P.D. No.
76 which, unlike R.A. No. 1125, provides that the appeals “shall not suspend
the collections of corresponding realty taxes as assessed by the provincial or
city assessor, without prejudice to subsequent adjustment depending upon the
final outcome of the appeal”.
The same Real Property Taxation (Book II) cited a DOJ opinion thus:
“DOJ OPINION (No. 99, s. 1976) that in the consideration and disposition of appealed cases, whether in the local boards or in the central board, the boards should (a) require, in appropriate notices, the appellants to pay the taxes imposed on the basis of the questioned assessment and to show proof of such payments; (b) if the appellant disregards or ignores the notice, and the period set by law within which the board is required to render its decision has lapsed without the appellant making the required payment, the appeal should be dismissed. (Letter dated June 15, 1976 to the Secretary of Finance, (Manila)”
Respondents-Appellees maintain “that if the petitioner’s Appeal on
Assessment before the LBAA is dismissible on grounds of non-payment of
taxes, then a fortiori, petitioner is not entitled to the equitable relief of TRO or
preliminary injunction”: that “in point of law, there is no valid appeal to speak of”:
that “a TRO or preliminary injunction issued by the court is totally erroneous”:
that “the LBAA, not the regular court, is the one ‘primarily’ tasked to interpret
Section 226 and 231 of the Local Government Code”: that “the LBAA has
already spoken directing petitioner to pay the tax first before the appeal may be
given due course”.
Sections 1 and 2, RULE IV OF THE RULES OF PROCEDURE
BEFORE THE CENTRAL BOARD OF ASSESSMENT APPEALS (the CBAA
“Section 1 – What may be appealed – All decisions, resolutions, and orders of Local Boards in cases involving (1) contested assessments of real properties, (2) claims for refund of taxes overpaid and claims for tax credits, and (3) protests against levies may be appealed to the Central Board of Assessment appeals as prescribed herein.”
“Section 2 – Who may appeal, when to appeal. – Any party in a case before the Local Board who feels aggrieved by the decision, resolution or order of the said Local Board may, within thirty (30) days from and after receipt of the said decision, resolution or order, appeal to the Central Board.”
The RULE provides for “All Orders” – without exception: whether Final or
Interlocutory, may be appealed to the CBAA by any party who feels “aggrieved
by the x x x order of said Local Board.”
Section 3, RULE 1 of the same CBAA Rules read:
“Section 3 – Suppletory Application of the Rules of Court. – In the absence of any applicable provisions in these Rules, the pertinent provisions of the Revised Rules of Court of the Philippines may be applied in a suppletory character and effect in all proceedings before the Central Board of Assessment Appeals without strictly adhering to the technical rules of evidence.
The CBAA RULES are adopted pursuant to the 4th Par., Sec. 230, of the
Local Government Code of 1991 (R.A. 7160), as follows:
“The Central Board Of Assessment Appeals, in the performance of its power and duties, may x x x adopt its own rules and regulations”.
In deference to Respondents-Appellees’ contention about the
Interlocutory character of the Order Appealed from: Could the Order have left
something to be done when what was undone was what should have been
done – to act with the case on the merit? Instead Appellee Local Board opted to
put the case on a dismissal-hold by a requirement imposed by a provision of
law not applicable to the case. Furthermore, Petitioner-Appellant is enjoined by
the Batangas RTC (supra), from compliance therewith. In fine, the Order need
not be complied with. Effectively the Order appealed from is a Final Order: it
leaves nothing to be done, and, in the words of Respondents-Appellees—
Obvious and evident is the fact that Petitioner-Appellant appealed the
instant case before the Local Board Of Assessment Appeals of the province of
Batangas under Sec. 226 of the Local Government Code of 1991 (R.A. 7160):
the Appeal was filed upon the Provincial Assessor’s Notice of Assessment and
within the Reglamentary period of filing the Appeal. Section 226, R.A. 7160
“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 x x x”.
Nowhere in the above- Sec. 226 is it provided that the tax on assessment
should be paid first before an appeal could prosper.
Sec. 252 reads:
“Sec. 252. Payment Under Protest. – (a) No protest shall be entertained unless the taxpayer first pay the tax. There shall be annotated on the tax receipts the words “paid under protest”. The protest in writing must be filed within thirty (30) days from the payment of the tax to the provincial, city or municipal treasurer in the case of a municipality within the Metropolitan Manila Area, who shall decide the protest within sixty (60) days from receipt.
“X x x
“(c) In the event that the protest is finally decided in favor of the taxpayer, the amount or portion of the tax protested shall be refunded to the protestant, or applied as tax credit against the existing or future tax liability.”
“(d) In the event that the protest is denied or upon the lapse of the sixty-day period prescribed in paragraph (a), the taxpayer may avail of the remedies as provided for in Chapter 3, Title Two, Book II of this Code.”
Before an appeal to the Local Board under the provisions of Section 252,
R.A. 7160 may be lodged with the Local Board, the following conditions must
occur: First: That the taxpayer has paid the questioned tax; Second: That the
Official Receipt for such payment is marked with the words “paid under protest”;
Third: That the taxpayer filed a claim for tax refund or credit with the treasurer
within thirty (30) days after the date of payment; Fourth: That the treasurer
denied, in writing, the claim for tax credit or refund, or did not act on the claim
within sixty (60) days after the date the claim was filed.
The subject of an appeal to the Local Board under the provisions of
Section 252 would be the treasurer’s denial of, or inaction on the appellant’s
claim for tax refund or credit. In this case, however, the LBAA of Batangas
acted as the Provincial Treasurer of Batangas in refusing to proceed with the
appeal, invoking as it does, Section 252, R.A. 7160.
The MECO case (supra) IS THE CASE OF Manila Electric Company vs.
Provincial Assessor of Batangas (CBAA Case No. 10, November 5, 1976)
wherein this Board, in a Resolution dated June 6, 1975, ruled that “Meralco
should first pay the taxes as assessed by the provincial assessor before this
board may proceed with the hearing of this case.”
Presidential Decree No. 76, referred to in the said case, was promulgated
on December 6, 1973, Section 7 par.3 of which reads as follows:
“The appeal, referring to appeals to the Provincial or City Board of Assessment Appeals and to the Central Board of Assessment Appeals, however, shall not suspend the collection of the corresponding realty taxes as assessed by the provincial or city assessor, without prejudice to subsequent adjustment depending upon the final outcome of the appeal.”
Presidential Decree No. 76 was repealed by PD 464, otherwise known as
the Real Property Tax Code, which was promulgated on May 20, 1974 and took
effect on June 1, 1974. Presidential Decree No. 464 was, of course, expressly
repealed by Republic Act No. 7160, otherwise known as the Local Government
Code of 1991 which took effect on January 1, 1992. The provisions of Sec. 7,
par.3, PD 76 are similar in substance to the provisions of Section 37 of PD 464,
which, in turn, was reproduced in Section 231 of RA 7160, thus:
“SEC. 231. Effect of Appeal on the Payment of Real Property Tax. – Appeal on the assessment of real property made under provisions of this Code shall, in no case, suspend the collection of the corresponding realty taxes on the property involved as assessed by the provincial or city assessor, without prejudice to subsequent adjustment depending upon the final outcome of the appeal.”
Even if we assume that the Local Board, in its refusal to hear the appeal
before it, intended to invoke the provisions of Section 231, instead of 252, still,
the order of the Local Board would be right. Historically, Section 54 of CA 470,
the law in force before PD 76, expressly and specifically prohibits any court
from entertaining any suit assailing the validity of a tax assessed under said Act
until the taxpayer shall have paid, under protest, the taxes assessed against
“SEC. 54. Restriction Upon Power of court to Impeach Tax. – No court shall entertain any suit assailing the validity of a tax assessed under this Act until the taxpayer shall have paid, under protest, the taxes assessed against him”.
Upon the other hand, the provisions of Sec. 7, Par. 3 of PD 76, Section
37 of PD 464, and Section 231 of RA 7160 merely declare or state that filing of
an appeal “shall, in no case, suspend the collection of the corresponding realty
taxes on the property involved as assessed by the provincial or city assessor”.
The phrase “shall, in no case, suspend the collection of the realty taxes”
explains the “effect of appeal on the payment of realty tax”, the latter phrase
being the caption of Section 231 of RA 7160. It simply means that an appeal
has “no effect” on the process of collecting the corresponding realty taxes. The
treasurer concerned may proceed with the collection of the taxes involved
through the remedies provided for under Sections 265 and 266 of RA 7160,
without even taking cognizance or notice of an appeal being filed since the
pending appeal cannot be used as a defense by the taxpayer-appellant against
If the legislature wanted the corresponding taxes to be paid before the
appeal may be entertained and heard, it could have easily provided so in clear
and unambiguous language as the National Assembly did under Section 54 of
Commonwealth Act. No. 470. Compelling a taxpayer to pay the realty tax
involved before its appeal may be entertained and heard is just not one of the
remedies afforded the government under the Local Government Code of 1991.
In Spouses Ramon A. Gonzales and Lilia Yusay vs. Province of Iloilo (38
SCRA 226), the Supreme Court rejected the contention that the property owner
should first pay the questionable realty tax before lodging an appeal, thus:
“The Court has therefore adopted the more simple test that where an assessment is disputed for whatever ground or reason, be it that the assessment is unjust, erroneous or improper, illegal or void or excessive or unreasonable, the action challenging the assessment, after first exhausting the administrative remedy of appeal to the assessment appeals board, and regardless of whether the corresponding realty tax had been paid and a refund sought, pertains to the exclusive and special jurisdiction of the tax court to the exclusion of the courts of first instance. Thus, in the recently decided case of Board of Assessment Appeals of Zamboanga del Sur vs. Samar Mining Co. and Court of Tax Appeals (L-28034, Feb. 27, 1971), the court upheld the jurisdiction of the tax court to rule upon the legality and validity of the disputed real estate assessment, rejecting the contention therein that the property owner should first pay the questioned realty tax before lodging an appeal from the assessment appeals board’s adverse decision to the tax court”.
The afore-quoted case was governed by Republic Act No. 1125, Section
11 of which “does not require that before an appeal from the decision of the
Board of Assessment Appeals can be brought to the Court of Tax Appeals it
must be first shown that the party disputing the assessment had paid under
protest the realty tax being assessed. Section 54 of Commonwealth Act. No.
470 does not apply and said section can be considered as impliedly repealed
by Sections 11 and 21 of R.A. 1125”. (Board of Assessment Appeals of
Zamboanga del Sur vs, Samar Mining Co., Inc. supra).
On Respondents-Appellees’ claim that “a TRO or preliminary injunction
issued by the court is totally erroneous”; that “the LBAA, not the regular court, is
the one ‘primarily’ tasked to interpret Section 226 of the Local Government
Code”, Sec. 229 (b) of R.A. 7160 provides:
“Sec. 229. Action by the Local Board of Assessment Appeals. – (a) X x x.
(b) X x x. The proceedings of the Board shall be conducted solely for the purpose of ascertaining the facts without necessarily adhering to the technical rules applicable in judicial proceedings”. (Underscoring supplied).
This Board need not go further as to believe, and to so hold that the
Local Board of Assessment Appeals of the Province of Batangas erred in its
Order, tantamount to the dismissal of the petition upon Petitioner-Appellant’s
failure to pay under protest subject realty tax within 15 days from receipt
WHEREFORE, the herein Order is hereby set aside and remanded to the
Local Board of Assessment Appeals of the Province of Batangas. The LBAA of
Batangas is hereby ordered to hear and proceed with the case on the merits
without requiring Petitioner-Appellant, First Gas Power Corporation to first pay
the tax on the questioned assessment.
Manila, Philippines, December 12, 2006.
(Signed) CESAR S. GUTIERREZ
ANGEL P. PALOMARES Member
(Signed) RAFAEL O. CORTES