Republic of the Philippines

CENTRAL BOARD OF ASSESSMENT APPEALS Manila

NATIONAL POWER CORPORATION, Petitioner-Appellant,

-versus-

THE LOCAL BOARD OF ASSESSMENT

CBAA CASE NO. L-72 (LBAA Case No. 06-17) Province of Benguet

APPEALS OF THE PROVINCE OF BENGUET,
Appellee,

-and-

THE PROVINCIAL TREASURER OF

BENGUET, ASSESSOR

THE PROVINCIAL OF BENGUET, THE

MUNICIPAL TREASURER OF ITOGON, BENGUET AND THE MUNICIPAL ASSESSOR OF ITOGON, BENGUET,
Respondents-Appellees. x—————————————————x

D E C I S I O N

This is an Appeal/Petition for Review by Petitioner-Appellant National

Power Corporation (NAPOCOR) from the denial of its Motion for

Reconsideration dated October 3, 2006 relative to the Order of the Local Board

of Assessment Appeals (LBAA) of the Province of Benguet dated July 28, 2006,

as follows:

“Therefore, pursuant to Sec. 7, Rule V of the Rules of Procedure of the Local Board of Assessment Appeals, the hearing of Petitioner’s Appeal is hereby DEFERRED until the corresponding taxes due on the real properties subject of the appeal shall have been paid under protest or the Petitioner shall have given surety bond x x x.”

Petitioner-Appellant filed its Appeal to the CBAA on November 22, 2006.

Petitioner-Appellant asserts that “payment under protest is not a condition sine

qua non before the herein Petition may be entertained, thus:

“Payment of tax under protest contemplated under Sec. 252 of R.A. No. 7160 is necessary where the question is the reasonableness of the amount assessed. Hence, if a taxpayer disputes the reasonableness of the increase in a real estate tax assessment, he is required to ‘first pay the tax’ under protest. However, where the petitioners are questioning the very authority and power of the assessor 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 validity of any increase. (Ursal , Phil. Law on Local Government Taxation, pages 368-369 citing Alejandro Ty vs. Trampe, et al. G.R. No. 11777 Dec. 1, 1995)”

Records disclose that Petitioner-Appellant is a government owned and

controlled corporation created pursuant to Republic Act 6395 and the owner of

the Binga Hydro Electric Power Plant at Itogon, Benguet.

Sometime in May 2000 the Municipal Assessor of Itogon, Benguet

caused the assessment and issuance of Tax Declarations on the properties

owned by Petitioner-Appellant, situated in NPC’s Binga Hydro Electric Power

Plant at Itogon, Benguet, viz:

Tax Declaration No. 99-006-01448
99-006-01457 99-006-01458 99-006-01505 99-006-01505
99-006-01516(N) 99-007-02221
99-008-01509

Classification Home Economics Building Nursery School
Elem. School Building Power House Industrial Road
High School Building Equipment/Structure Machineries/Equipments

On March 17, 2006, petitioner formally received a demand letter dated

February 16, 2006 from the OIC-Provincial Treasurer, Imelda I. Macanes,

regarding petitioner’s alleged tax delinquency in the amount of SIXTY TWO

MILLION SIX HUNDRED FORTY-FIVE THOUSAND SIX HUNDRED SIXTY-

EIGHT AND 80/100 PESOS (P62,645,668.80), including alleged penalties.

Petitioner-Appellant claims that the “huge assessment is due to the so-

called “escape revision” which is made retroactive to 1994 up to the present,

and the x x x properties of petitioner x x x such as the reservoir, machineries

and equipments which are actually, directly and exclusively used x x x in the

generation and transmission of electricity and the school buildings are being

assessed for taxation when the law clearly, categorically and unequivocally

provided for their exemption.”

This Board scheduled a hearing and met with the parties on January 31,

2007.

The desirability of forging a Compromise Agreement was emphasized at

this Board’s initial session on January 31, 2007. As the parties were amenable

thereto, the same was intensely pursued.

Pursuant to R.A. 9285 of April 2, 2004, viz: “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”, Executive Order (E.O.) No. 523, signed by the President on April

7, 2006 “WHICH INSTITUTED THE USE OF ALTERNATIVE DISPUTE

RESOLUTION IN THE EXECUTIVE DEPARTMENT OF GOVERNMENT”, and

the permeating policy of the Supreme Court on Amicable Settlement of Cases,

this Board dwelt mainly on the adoption of a Compromise Agreement as it

conducted its first session of the case at hand as scheduled, on January 31,

2007.

Both parties opted to abide by it and agreed to meet at the Provincial

Capitol of Benguet on March 14, 2007 for the purpose.

The timetable to finalize the Compromise Agreement was set at April 18,

2007. A lot more time however, was needed for its negotiation than the

envisioned April 18, 2007 schedule. This Board therefore gave the parties such

amplitude of time to be able to achieve the intended Amicable Settlement.

In the meantime, however, that the Compromise Agreement was being

negotiated, the parties endeavored to present evidence on the merit. This Board

conducted an ocular inspection of petitioner-appellant’s assessed premises on

January 30 and 31, 2008, as requested, apropos, to meet the rest of the party,

and enhance the negotiations for a Compromise Agreement. Despite our

efforts, however, as shown by the Board’s settings on April 3, July 3 and August

28, 2008 and the prolonged negotiations between the parties, no Compromise

Agreement was reached.

On August 28, 2008, the parties were granted their request to reset the

hearing on September 10, 2008. At the hearing on September 10, 2008

however, the parties manifested their intention to file their respective

Memoranda and would submit the case for Resolution, signaling that the

Compromise Agreement has already failed.

Petitioner-Appellant’s ground (assignment of error) is as follows:

“THE LBAA COMMITTED GRAVE AND PALPABLE ERROR IN HOLDING THAT PETITIONER/APPELLANT SHOULD FIRST PAY THE TAX AS ASSESSED BEFORE THE PETITION WILL BE HEARD ON THE MERITS.”

Utmost in this case is the jurisdictional issue of PRESCRIPTION. And this

Board has not proceeded with it, as it was confronted with the reality of a

possible Compromise Agreement.

Petitioner-Appellant maintains that it filed its appeal on time, averring that

it received the assailed Resolution (the Resolution denying the Motion for

Reconsideration) on October 17, 2006 so that thirty (30) days from October 17,

2006, within which to file its appeal with the CBAA is or should be on or before

November 16, 2006.

Petitioner-Appellant cited Section 229(c) of R.A. 7160 on the timeliness of

its appeal. The provision reads:

“Sec. 229. Action by the Local Board of Assessment Appeals. –

(c) x x x. The owner of the property or the person having legal interest therein or the assessor who is not satisfied with the decision of the Board may, within thirty (30) days after receipt of the decision of said Board, appeal to the Central Board of Assessment Appeals, as herein provided. The decision of the Central Board shall be final and executory.”

Petitioner-Appellant failed to realize that the period of prescription starts

from receipt of the Order of the LBAA which deferred the hearing on the

petitioner-appellant’s Petition. By its own admission, said Order was “received

by petitioner on August 9, 2006,”hence the period of appeal to the CBAA should

have prescribed thirty (30) days thereafter, or to be exact, on September 8,

2006.

The provision does not require petitioner-appellant to file a Motion for

Reconsideration. But if it does, it files the same at its own risk as the Motion for

Reconsideration does not stay the period of prescription.

To repeat therefore, Petitioner-Appellant has thirty (30) days from August

9, 2006 or not later than September 8, 2006 within which to appeal to the

Central Board of Assessment Appeals (CBAA). Clearly timeliness has been

considerably breached when the herein Appeal reached this Board on

November 22, 2006, seventy-five (75) days, way beyond the September 8,

2006 deadline.

IN VIEW THEREOF, the instant appeal is hereby dismissed for having

been filed out of time. Petitioner-Appellant is advised to proceed under Section

206 of R.A. 7160 (the Local Government Code of 1991) and take the necessary

steps in support of its claim for exemption to be dropped from the assessment

roll.

SO ORDERED.

Manila, Philippines, July 28, 2011.

(Signed) OFELIA A. MARQUEZ
Chairman

(Signed) RAFAEL O. CORTES
Member

(Signed) ROBERTO D. GEOTINA
Member