Republic of the Philippines

CENTRAL BOARD OF ASSESSMENT APPEALS Manila

PAPER INDUSTRIES CORPORATION OF THE PHILIPPINES,
Petitioner-Appellant,

– versus – CBAA CASE NO. M-05

LOCAL BOARD OF ASSESSMENT APPEALS OF SURIGAO DEL SUR,
Appellee,

– and –

PROVINCIAL ASSESSOR OF SURIGAO DEL SUR,
Respondents-Appellees.

x – – – – – – – – – – – – – – – – – – – – – – – – – – – x

D E C I S I O N

Before this Board is an Appeal of Petitioner-Appellant Paper Industries

Corporation of the Philippines (PICOP) from the decision of Appellee Local Board

of Assessment Appeals of Surigao del Sur, upholding the assessments made by

Respondent Appellee Provincial Assessor of Surigao del Sur of the timberlands

held by Petitioner-Appellant situated in the Municipalities of Lingig, Bislig,

Hinatuan, Tagbina and Barobo, all in the Province of Surigao del Sur, under Tax

Declaration Nos. 1485, 4598,1607, 1906 and 1436, with taxes effective 1992.

Records show that Respondent-Appellee based his assessments of

subject timberlands on the Certification dated February 11, 1992, issued by

Community Environment and Natural Resources Officer (CENRO) Cenon M.

Castillo, that the total volume of timber “annual actual cut” for 1991 was

613,296 cubic meters.

Not satisfied with the assessments, Petitioner-Appellant appealed to

Appellee Local Board, contending that the assessments should have been based

on 225,051.83 cubic meters, comprising the total saw and construction timber

actually cut in 1991, per a later Certification issued by the same CENRO Cenon

M. Castillo, dated March 3, 1992 shown herein below:

[table “” not found /]

Under 2nd Indorsement, dated August 12, 1992, Respondent-Appellee

interposed an objection to the Appeal of Petitioner-Appellant before the Appellee

Local Board for lack of proof of payment of the realty tax under the questioned

Tax Declarations which is allegedly a “jurisdictional requirement” of Section 231

of the Local Government Code of 1991, before an assessment appeal can be

entertained by Appellee Local Board.

Appellee Local Board rendered its decision affirming the assessment of

Respondent-Appellee, dated September 18, 1992. On Motion for

Reconsideration, Appellee Board issued a Resolution sustaining its decision,

dated November 20, 1992.

On Appeal before this Board, the issues for consideration are the following:

1. Whether or not payment of real property tax as assessed is a jurisdictional requirement before an assessment appeal can be entertained by Appellee Local Board;

2. Whether or not Petitioner-Appellant was denied due process of law;

3. Whether or not Petitioner-Appellant’s appeal to this Board mailed on January 22, 1993 was filed beyond the reglementary period of thirty (30) days; and

4. Whether or not Respondent-Appellee correctly used as basis the first Certification issued by CENRO Cenon M. Castillo, dated February 11, 1992, that the total volume of actually cut timber for 1991 was 613,296 cu.m., for computation of the tax liability of Petitioner-Appellant.

Anent the first issue, this Board had ruled in the case of the Manila Electric

Company vs. The Provincial Assessor of Batangas, et al., CBAA Case No. 10, in

implementation of Section 37 of the Real Property Tax Code (PD 464) which is

quoted below viz:

“Sec. 37. Effect of Appeals on the Payment of the Real Property Tax. – Appeals on assessments 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

Reference: Book VII, pp. 280-287

prejudice to subsequent adjustment depending upon the final outcome of the appeal,”

and reiterated the same in Philippine Packing Corporation vs. City Assessor of

Cagayan, et al., CBAA Case No. 54 and cited in recent decisions of this Board,

that the realty taxes assessed by the Assessor should first be paid before this

Board may proceed with the hearing of the appeal. In CBAA Case No. 10, we

stated the following:

“Collection of the realty taxes as assessed by the provincial or city assessor shall not be suspended by an appeal filed thereunder. While P.D. No. 76 does not contain any express provision that an appeal to this Board may not be entertained unless the taxes in question are paid (as expressly provided in section 54 of Commonwealth Act No. 470), the result of the implementation of the above-quoted provision of P.D. No. 76 would substantially be the same. For under the latter, the protestant-appellant is obligated to pay the realty taxes as assessed by the provincial or city assessor notwithstanding the filing of an appeal. We believe that any other interpretation would defeat or nullify this provision – for if the appeal were entertained without requiring the protestant-appellant to pay the realty tax as assessed by the provincial or city assessor the effect would be that the appeal will have suspended the collection of the said tax, contrary to the express mandate of said provision. Any interpretation which would defeat or nullify an provision is by settled rules of construction to be abhorred and avoided.”

Section 231 of the Local Government Code of 1991 (RA 7160) has the

same pronouncement relative to payment of taxes pending appeal which

provides as follows:

“Sec. 231. Effect of Appeals on the Payment of the Real Property Tax. – Appeals on assessments 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.”

From the context thereat, Petitioner-Appellant should pay the realty taxes

on the properties in question before this Board may entertain its appeal.

However, as ruled by this Board in CBAA Case No. 69, Fortune Cement

Corporation vs. BAA of Batangas, et al., in granting Fortune Cement

Corporation’s alternative prayer that it be allowed to file a surety bond in lieu of

cash which shall guarantee the real property taxes due the government, this

Board believes that the surety bond when approved can serve the same purpose

as the payment of taxes under protest if it will guarantee the payment of realty

taxes due the government.

Reference: Book VII, pp. 280-287

Relative to the 2nd issue, records disclose that Appellee Local Board did

not conduct hearing on the merits of this case. Hence, as claimed by Petitioner-

Appellant, it was not duly afforded an opportunity to formally present evidence

and argue on the merits of its Appeal. The decision of Appellee Local Board was

based on mere “administrative communications” of the parties.

The proceedings held in the Appellee Local Board suffered from lack of

due process. The decision rendered thereunder is therefore of questionable

validity (City Assessor of Laoag City vs. Apolinario, CBAA Case No. 214). In view

thereof, the third issue relative to prescription of the Appeal before this Board for

late filing for one or two days is rendered moot and academic. On the other hand,

the fourth issue which pertains to the merits of the case is determinable in proper

proceedings on the merits.

WHEREFORE, the decision of the Local Board of the Province of Surigao

del Sur is hereby SET ASIDE and this CASE is REMANDED to the said Local

Board for proper proceedings on the merits after full and up-to-date payment of

the realty taxes on subject properties as assessed by Respondent-Appellee

Provincial Assessor of Surigao del Sur, or the filing of surety bond to guarantee

the payment of taxes.

SO ORDERED.

Manila, Philippines, April 10, 1995.

(Signed) MARGARITA G. MAGISTRADO
Chairman

(Signed)

ELEANOR A. SANTOS VACANT Member Member

Reference: Book VII, pp. 280-287