Republic of the Philippines

CENTRAL BOARD OF ASSESSMENT APPEALS Manila

PROVINCIAL ASSESSOR OF LEYTE AND MUNICIPAL ASSESSOR OF KANANGA, LEYTE,
Respondent-Appellant,

– versus –

CBAA CASE NO. V-08 LOCAL BOARD OF ASSESSMENT

APPEALS OF LEYTE,

THE PROVINCE OF

Appellee,

– and –

HIDECO SUGAR MILLING CO., INC., Petitioner-Appellee.
x – – – – – – – – – – – – – – – – – – – – – – – – – – – x

DECISION

This is an appeal by the Provincial Assessor of Leyte and the Municipal

Assessor of Kananga, Leyte from the Decision rendered by the Appellee Board

on January 20, 1995 in LBAA Case No. 003, the dispositive portion of which

reads as follows:

“IN VIEW OF ALL THE FOREGOING, the Provincial Board of Assessment Appeals of the Province of Leyte, hereby renders decision:

“1. Ordering the Provincial Assessor of Leyte, as well as the Municipal Assessor of Kananga, Leyte, to amend/revise all the tax declarations issued to HISUMCO as a result of the general revision made effective for 1994 covering industrial lands and set the base unit market value thereof at P100.00 per square meter instead of P160.00, and apply the corresponding assessment level;

“2. Declaring the revision of the unit market value for buildings, improvements, machineries and equipments of HISUMCO made by the Respondents pursuant to the unilateral implementation of this prepared schedule of base unit market value as ineffective, same having no legal basis and in violation of Section 212 of R.A. 7160; and orders the Provincial Assessor of Leyte, as well as the Municipal Assessor of Kananga, Leyte to amend/revise all the tax declarations issued to HISUMCO as a result of the general revisions made effective for 1994 covering buildings, improvements, machineries and equipments, and to observe and maintain the status quo of the base unit market value and assessment thereof prevailing as of December 31, 1993;

“3. Ordering the Municipal Assessor of Kananga, Leyte, to give a tax credit in favor of HISUMCO for its excess payment of the real property taxes for the year 1994 as a result of the general revision of real property made by Respondents; and

Reference: Book IX, pp. 78-100

“4. Let a copy of this decision furnish the Sangguniang Panlalawigan of Leyte for its appropriate action and guidance.”

The appeal and Memorandum of Mr. Francisco Caubalejo, the Municipal

Assessor of Kananga, Leyte, was dated February 17, 1995 and received by this

Board on February 21, 1995, while the Appeal of Atty. Rafael M. Iriarte,

Provincial Assessor of Leyte, was dated February 15, 1995 and received by this

Board on March 10, 1995. Both Respondents-Appellants averred that they were

appealing the Local Board’s decision for being contrary to law, documentary

evidence and facts; that the protest was filed out of time and the Local Board

had no jurisdiction; and that they received the decision of the Local Board on

January 30, 1995.

The Provincial Assessor’s Appellant’s Brief, dated March 7, 1995 and

received by this Board on April 4, 1995, contains the same allegations

contained in the Kananga Municipal Assessor’s Appeal and Memorandum; that

the questioned assessments were done in accordance with law and that the

protest was filed out of time.

In its Answer dated May 27, 1995 and received by this Board on June 7,

1995, Petitioner-Appellee, Hideco Sugar Milling Co., Inc. (HISUMCO, for

brevity), alleged that no public hearing was conducted by the Municipal

Assessor on the schedule of fair market value; that neither the schedule of fair

market values nor Sangguniang Panlalawigan Resolution No. 609-93, adopting

the said schedule of fair market values, has ever been published, in violation of

Section 212 of RA 7160; that, ever granting arguendo that SP Resolution No.

609-93 was validly published and that it was legal for all intents and purposes, it

is clear upon the resolution that only lands are covered; that no factual

evidence were presented by Respondents-Appellants to establish that they

complied with the pertinent provisions of RA 7160; that the appeal before the

Local Board was seasonably filed; and that Respondents-Appellants never

raised the issue of late filing before the Local Board.

Reference: Book IX, pp. 78-100

In a “Memorandum that Appeal is Filed out of Time” dated August 15,

1995 and received by this Board on August 31, 1995, Respondents-Appellants

argued that the appeal was filed out of time since HISUMCO received the

Notice of Assessment (RPTOP) on February 14, 1994 and it filed its Appeal

only on May 24, 1994, more than sixty (60) days allowed by law.

It appears from the records that HISUMCO, in a letter dated April 14,

1994, and received by the Appellee Local Board on April 15, 1994, originally

filed its protest on the assessments on HISUMCO’s eleven (11) parcels of land

and thirty-four (34) buildings and fourteen (14) improvements thereon.

In a letter dated April 18, 1994, Atty. Peregrin G. Dingcong, Registrar of

Deeds and as Chairman of the Local Board, informed HISUMCO that the

latter’s appeal was denied for the reasons that (1) it did not mention the date

when the contested assessments were received; (2) it was not under oath and

not being in the prescribed form; and (3) it was not supported by tax

declarations and affidavits.

In a letter dated May 16, 1994, HISUMCO asked the Registrar of Deeds

to reconsider his Order dated April 18, 1994 and, with it, refilled its petition

subscribed and sworn to on May 17, 1994, stating that the Notice of

assessment was received on February 14, 1994. Attached thereto were copies

of assessments (Annexes “A” to “A-12”); copies of tax declarations (Annexes

“B” to “B-28”); copy of a Deed of Absolute Sale covering the subject parcels of

land, buildings and improvements purchased by HISUMCO from APT (Asset

Privatization Trust) (Annex “C”); copy of the appraisal report of Asian Appraisal

(Annex “D”); copy of the appraisal report of Cuervo Appraisals (Annex “E”);

copy of the Deed of Absolute Sale over machineries and equipment purchased

by HISUMCO from APT (Annex “E”); copy of the official receipt evidencing

payment of the capital gains tax (Annex “F”); and an affidavit of Mr. Giorgidi B.

Aggabao dated May 17, 1994 setting forth the circumstances surrounding the

purchase of the subject properties by HISUMCO from the APT.

Reference: Book IX, pp. 78-100

HISUMCO alleged that all the subject properties were acquired on

January 21, 1991 from the APT; that the parcels of lands and the buildings

thereon were acquired at a total cost of P63,354,100.00, while the Municipal

Assessor placed the total market value of these properties at P115 million (P41

million for the parcels of land and P74 million for the buildings and

improvements, excluding machineries); that the machineries and equipment,

which HISUMCO considers as personalties for being detachable and never

intended as permanent accessories and therefore, exempt from real property

taxes, were assessed at P160 million. HISUMCO does not believe that there

had been any dramatic increase4 in values to warrant a doubling of values of

such properties.

In his answer dated June 22, 1994, and received by the Local Board on

June 24, 1994, the Provincial Assessor of Leyte stated that the questioned

assessments were in accordance with the general revision made pursuant to

Section 218, 219, 224 and 225 of R.A. 7160, Local Assessment Regulations

No. 1-92, Department of Finance Order No. 22-73, and Assessment

Regulations No. 1-80. In addition, the Provincial Assessor adopted the answer

of the Municipal Assessor of Kananga, Leyte, dated June 6, 1994, and attached

a copy thereof to his own answer as Annex “A”.

In that letter (dated June 6, 1994), the Municipal Assessor stated that, out

of 56 real property units (RPUs), only 27 were previously declared; that

HISUMCO refused to present documents surrounding the subject properties

when repeatedly requested in June, 1993, on August 11 and 16, 1993, and on

September 8, 1993; and that the assessments were based on the current

schedule of market values (SP Resolution No. 609-93, July 13, 1993).

The issues in this case are as follows:

1. Whether or not the appeal of Petitioner-Appellee before the Local

Board was filed within the reglementary period;

Reference: Book IX, pp. 78-100

2. Whether or not SP Resolution No. 609-93 is valid although the

schedule of market values and the resolution itself allegedly lacked hearing and

publication; and

3. Whether or not the questioned assessments on subject parcels of

land, buildings and other improvement, and machinery and equipment are valid,

fair and equitable.

On the first issue, Respondents-Appellants say that HISUMCO’s appeal

to the Local Board was filed out of time as prescribed by Section 226 of RA

7160, which provides thus:

“SEC. 226. Local Board of Assessment Appeals. – Any owner or person having legal interest in the property who is not satisfied with the action or inaction 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.” (Underscoring supplied)

The records show that HISUMCO filed its letter-protest dated April 14,

1994 with the Local Board on April 15, 1994, exactly sixty (60) days after

HISUMCO received the notice of assessment in the form of Real Property Tax

Orders of Payment (RPTOPs) on February 14, 1994, albeit the RPTOPs are

not in accordance with the form prescribed under Local Assessment

Regulations No. 1-92 dated October 6, 1992.

Respondents-Appellants may argue that HISUMCO’s letter-protest could

not be considered an appeal for not being in the prescribed form as stated by

the Registrar of Deeds in his letter to HISUMCO dated April 18, 1994 and

received by HISUMCO on April 24, 1994, initially denying the petition for

HISUMCO. However, HISUMCO filed, together with a motion for

reconsideration of that Order dated April 18, 1994, an amended petition dated

May 16, 1994 and subscribed and sworn to on May 17, 1994.

As provided for in Section 229 (b) of RA 7160, “x x x The proceedings of

the Board shall be conducted solely for the purpose of ascertaining the facts

without necessarily adhering to technical rules applicable in judicial

Reference: Book IX, pp. 78-100

proceedings.” Thus, in Jesus E. Sanchez vs. BAA and Provincial Assessor of

Batangas (CBAA Case No. 252, Dec. 3, 1990), we said:

“In CBAA Case No. 154, Atlas Consolidated Mining and Development Corporation, Petitioner-Appellant, versus the Board of Assessment Appeals of Masbate, et al., it was ruled that “the requirement on formalities and procedure should be liberally interpreted to give substance and meaning to the law and not to frustrate the rights of the individuals” (Asperac vs. Itchon, 16 SCRA 921 [1966]; Manila Railroad vs. Attorney General, 20 Phil. 523 [1971] and “that failure to file a notice of appeal under oath is not a ground for dismissal of an appeal”, such deficiency being curative in nature. Furthermore, “absence of the oath is a formal and not a jurisdictional defect” (Valino vs. Munoz, 35 SCRA 700 [1967] and the “oath may just be ordered to be accomplished” (Oshita vs. Republic, 19 SCRA 700 [1967], cited in CBAA Case No. 154, supra).

“The requirement regarding the use of the prescribed form does not preclude the use of other forms so long as such other form is sufficient to inform the reviewing authority of the basis of the appeal; that it clearly and sufficiently states the date upon which the reviewing authority may base his evaluation of the appeal; and that it contains the specific grounds for the appeal, fully substantiated by the necessary documents (Supio vs. Garde, 45 SCRA 429 [1972], cited in CBAA Case No. 154, supra).

“The filing of a subsequent appeal in the prescribed form by Petitioner-Appellant on June 19, 1989, after hearing, but before final resolution has cured the deficiencies in his first Notice of Appeal because amendments relate back to the date of the original pleading sought to be amended. Since amendment presupposes the existence of something sought to be amended, the tolling of the period should relate back to the filing of the pleading sought to be amended (CBAA Case No. 154, supra, citing the Supreme Court’s ruling in the case of the Philippine Independent Church vs. Mates, 1 SCRA 1110 [1970]).”

We believe, therefore, that Petitioner-Appellee’s appeal before the Local

Board was filed within the period prescribed by law. Besides, Respondents-

Appellants are now stopped from raising the issue of jurisdiction. Respondents-

Appellants could have raised this issue seasonably before the Local Board.

Instead, they invoked the very same jurisdiction of the Local Board by filing an

answer and seeking affirmative relief from it. Thus, in Suarez vs. Court of

Appeals (G.R. No. 80199, June 6, 1990, 186 SCRA 339, cited in Benguet

Corporation vs. Central Board of Assessment Appeals, et al., June 29, 1992, In

re CBAA Case No. 237, May 28, 1990), the Supreme Court ruled:

“x x x It is settled that any decision rendered without jurisdiction is a total nullity and must be struck down at any time, even on appeal before this Court. The only exception is where the party raising the issue is barred by estoppels (Tijam v. Sibonghanoy, 23 SCRA 29, reiterated in Solid Homes, Inc. vs. Payawal and Court of Appeals, G.R. No. 84811, August 29, 1989).

“While petitioner could have prevented the trial court from exercising jurisdiction over the case by seasonably taking exception thereto, they instead invoked the very same jurisdiction of by filing an answer and seeking affirmative relief from it. What is more, they participated in the trial

Reference: Book IX, pp. 78-100

of the case by cross-examining respondent. Upon the premises, petitioner cannot now be allowed belatedly to adopt an inconsistent posture by attacking the jurisdiction of the court to which they had submitted themselves voluntarily (Tijam v. Sibonghanoy, supra).”

On the second issue, Petitioner-Appellee alleged that no public hearing

was conducted by the Municipal Assessor on the schedule of fair market value;

that neither the schedule of fair market values not Sangguniang Panlalawigan

Resolution No. 609-93, adopting the schedule of fair market values, has ever

been published, in violation of Section 212 of R.A. 7160.

Section 212 of RA 7160 provides as follows:

‘SEC. 212. Preparation of Schedule of Fair Market Values. – Before any general revision of property assessment is made pursuant to the provisions of this Title, there shall be prepared a schedule of fair market values by the provincial, city and municipal assessors within the Metropolitan Manila Area for the different classes of real property situated in their respective local government units for enactment by ordinance of the sanggunian concerned. The schedule of fair market values shall be published in a newspaper of general circulation in the province, city or municipality concerned, or in the absence thereof, shall be posted in the provincial capitol, city or municipal hall and in two other conspicuous places therein.” (Underscoring supplied)

The law says that, in the absence of a newspaper of general circulation in

the province, city or municipality concerned, the schedule of fair market values

shall be posted in the provincial capitol, city or municipal hall and in two

other conspicuous places therein. In his Appeal and Memorandum dated

February 17, 1995 and received by this Board on February 21, 1995, the

Municipal Assessor of Kananga, Leyte stated that “the findings of the Provincial

Board of Tax Appeals is not factual in any manner as Sangguniang

Panlalawigan Ordinance No. 609-93 was posted in the Provincial Capitol, in the

Municipal Hall of Kananga and in conspicuous public places of the province and

municipality respectively, in compliance to Section 212 of R.A. 7160.” There is

that disputable presumption that official duty has been performed [Sec. 3(m),

Rule 131, Revised Rules of Court]. This Board believes, and so holds, that

Petitioner-Appellee has not successfully overcome this presumption (See

Benjamin M. Tirol v. BAA & Prov. Assessor of Capiz, CBAA Case No. 52).

Upon the other hand, although Section 212, RA 7160, supra, requires the

publication in a newspaper of general circulation in the locality or posting of the

Reference: Book IX, pp. 78-100

schedule of fair market values in conspicuous places, it does not require a

public hearing on the same. Nor does it state the consequences of failure to so

publish or post the same schedule. The inescapable conclusion, therefore, is

that failure to comply with the requirement of publication or posting of the

schedule of fair market values does not render the said schedule and the

enabling ordinance null and void, as taxpayers who may not agree with the

assessments based thereon may still question the same assessments under

the provisions of Section 226 of R A 7160.

On the third issue, Petitioner-Appellee states that the subject parcels of

land were exhorbitantly valued by the Municipal Assessor. A Deed of Absolute

Sale (pp. 51-56, Records) executed by and between the Asset Privatization

Trust (APT) and Hilongos Development Corporation on January 21, 1991 and

listed as Doc. No. notarial register of Notary Public Mr. Rolando K. Javier,

shows that the eleven (11) parcels of land, together with the buildings and other

improvements thereon, were ceded by the APT at a total price of Sixty-Three

Million Three Fifty-Four Thousand One Hundred Pesos (P63,354,100.00),

Philippine Currency. A list submitted by Petitioner-Appellee (pp. 302-310,

Records) show that the total price for the buildings and other improvements

(excluding machinery and equipment) was Fifty-One Million Eight Hundred

Forty-Nine Thousand Six Hundred Sixty-Eight Pesos (P51,849,668.00). That

leaves Eleven Million Five Hundred Four Thousand Four Hundred Thirty-Two

Pesos (P11,504,432.00) as the selling price for the eleven (11) parcels of land.

The said parcels of land are situated in the same locality. And, with a

combined area of 258,117 square meters, the said parcels of land had in

January, 1991 a fair market value of about P44.570609 per square meter (that

is, P11,504,432.00 divided by 258.117 square meters). This was the stand of

the Government through the APT.

Respondents-Appellants valued these parcels of land at P35.00 per

square meter effective 1991. In his brief dated March 7, 1995, the Provincial

Reference: Book IX, pp. 78-100

Assessor alleged that the said amount of P35.00 was the base unit value of

industrial lands in Kananga from 1985 to 1990; that for 1991-1993, the base

unit value should have been P60.00 per square meter per Assessment

Regulation No. 7-77 dated July 25, 1977 of the Department of Finance, but that

no revisions were actually made pursuant thereto. Beginning 1994, however,

Respondents-Appellees valued these parcels of land at P160.00 per square

meter in accordance with the schedule of fair market values prepared and

recommended by Respondents-Appellants to, and approved by, the

Sangguniang Panlalawigan of Leyte through its Resolution No. 609-93.

We asked ourselves that circumstances, if any, which influenced the

dramatic rise in the market value of the subject parcels of land. We could think

of none and Respondents-Appellees did not supply any. On the other hand,

because the Chairman and Members of the Local Board reside in the area, we

believe that they are in a better position than we are in as far as appraising the

subject property is concerned.

We, therefore, agree with the Local Board that P100.00 per square meter

was the fair market value of the said parcels of land as of January, 1994.

Still on the third issue concerning buildings and other improvements,

Petitioner-Appellee states that “even granting, arguendo, that SP Resolution

No. 609-93 was validly published and that it was legal for all intents and

purposes, it is clear upon the resolution that only lands are covered.”

Respondents-Appellants countered that the questioned assessments were

based on the various provisions of RA 7160 and various assessment rules and

regulations, including Local Assessment Regulations No. 1-92 dated October 6,

1992.

The assessments on buildings and improvements being questioned are

supposed to be revisions of property assessments mandated under RA 7160.

Section 212, supra, thereof expressly states that Before any general revision

of property assessment is made pursuant to the provisions of this Title,

Reference: Book IX, pp. 78-100

there shall be prepared a schedule of fair market values by the provincial,

city and municipal assessors within the Metropolitan Manila Area for the

different classes of real property situated in their respective local

government units for enactment by ordinance of the sanggunian

concerned x x x.”

To reinforce the abovementioned requirement, Local Assessment

Regulations No. 1-92 dated October 6, 1992 requires, under Section 18 thereof,

the preparation of such schedule of market values before any general revision

of real property assessment is made and provides, under Section 19 thereof,

that such schedule shall be the basis for appraisal and assessment of lands,

buildings and other improvements, thus –

“Section 18. Preparation of Schedule of Market Values. – Before any general revision of real property assessment is made, there shall be prepared for each municipality or city, a schedule of market values for different classes of real property therein situated in such form and detail as shall be prescribed herein. (Underscoring supplied)

“x x x”

“Section 19. Duty of the Provincial/City/Municipal Assessor. – It is the duty of all provincial and city assessors, and the municipal assessors of the municipalities within the Metropolitan Manila Area to prepare or cause to be prepared a schedule of market values as the basis for appraisal and assessment of lands, buildings and other improvements situated in their respective jurisdiction within one (1) year after the effectivity of the Code and every three (3) years thereafter.” (Underscoring supplied)

Local Assessment Regulations No. 1-92, supra, even goes further to

provide on how buildings are to be classified (Section 38), on the necessity of

establishing, by the assessor, a schedule of base unit construction cost for

buildings with a depreciation table (Section 40), providing a format (Annex “J”)

for the purpose (Section 41).

Section 42, ibid., provides that “the schedule of market values for all

classes of real property situated in one city or municipality shall be prepared in

accordance with the format. x x x” And Section 18, ibid., second paragraph,

even provides that “Said schedule, together with the abstract of the data on

which it is based, shall be submitted to the sanggunian concerned for

enactment by ordinance not later than the thirty first of October immediately

Reference: Book IX, pp. 78-100

preceding the period the general revision of assessment shall be undertaken

and prescribed in the assessment calendar herein. The sanggunia concerned

shall have ninety (90) days from the date of receipt within which to review said

schedule to determine whether it conforms with the regulations set forth herein.”

A certification signed by Mr. Arturo E. Andrade, Acting Provincial

Secretary (Exh. “I”, p. 89, Records), appear as follows:

“Republic of the Philippines “PROVINCE OF LEYTE “Tacloban City

“-o0o-

“EXCERPT FROM THE MINUTES OF THE REGULAR “SESSION OF THE SANGGUNIANG PANLALAWIGAN OF “LEYTE, HELD IN THE SESSION HALL, JULY 13, “ “1993

“RESOLUTION NO. 609-93

“On motion of the Honorable Romulo A. Tiu, duly seconded by the Honorable Nestor P. Villasin.

“RESOLVED, that the Schedule of Base Unit Market Values for residential, commercial, and industrial lands in the Province of Leyte as submitted to this Board by the Provincial Assessor of Leyte be, as it is hereby approved.

“Approved unanimously.

“I HEREBY CERTIFY to the correctness of the foregoing resolution.

SGD. “ARTURO E. ANDRADE “Acting Provincial Secretary”

In the so-called “Schedule of Unit Market Values for Lands and Base Unit

Construction Cost for Building and Other Structures” (pp. 90-95, Records)

which was the subject of SP Resolution No. 609-93 and attached to the afore-

quoted certification, there appears only the unit market values for residential,

commercial, and industrial lands. In fact, in a “Committee Report” (pp. 48-50,

Records) received and approved by the Sangguniang Panlalawigan of Leyte on

September 27, 1994 per SP Resolution No. 683-94, the Special Committee

created on June 21, 1994 under SP Resolution No. 426-94 to study and

discuss with the Provincial Assessor in connection with the Schedule of Base

Unit Market Values, stated:

x x x

Reference: Book IX, pp. 78-100

“Now, going over the provisions of Art. 303 of the Implementing Rules, R.A. 7160, the same is mandatory before any implementation is made. Moreover, the approved resolution is very clear and does not include agricultural, building and other improvements. Sad to say, inspite of the clear provisions of Art. 303 and its non-inclusion, the Provincial Assessor’s Office proceeded in the revision/assessment and the collection of real estate taxes. (Underscoring supplied)

“In the light of all the foregoing, the committee is of the belief and opinion that the following actions should be made:

a) Suspend the implementation of the assessment insofar as agricultural, building and other improvements;

b) Cause the amendment of SP Resolution No. 609-93 to include agricultural, building and other improvements;

c) Comply the mandatory provisions of Art. 303 of the Implementing Rules and Regulations of the Local Government Code of 1991, Rep. Act No. 7160;

d) Review the assessment pertaining to agricultural, building and other improvements.”

In view of the foregoing, this Board holds that the questioned

assessments for buildings and other improvements on the lands of Petitioner-

Appellee were contrary to the provisions of Section 212 of RA 7160 and Local

Assessment Regulations No. 1-92 dated October 6, 1992.

Still on the third issue concerning machinery and equipment, Petitioner-

Appellee stated in its amended appeal to the Local Board:

“With all due respect, the Municipal Assessor erred in levying a realty tax on the machineries and equipment of the company which are properly classifiable as personalties. During the negotiation between the company and APT leading to the sale of the mill assets, it was concluded that the machineries and equipment ought to be covered by a separate Deed of Absolute Sale because they are personalties and, consequently, exempt from the payment of capital gains. The machineries are detachable without materially injuring the building to which they are attached and were never intended as permanent accessions. Thus, a separate Deed of Absolute Sale (Annex “E”, hereof) was drawn.

Of course, we seriously doubt the statement of Petitioner-Appellee that

all its machineries are properly classifiable as personalties and that they are

exempt from the capital gains tax. But that aside, improvements on land are

commonly taxed as realty even though for some purposes they migh be

considered personalty (84, C.J.S. 181-2, Notes 40 and 41). It is a familiar

phenomenon to see things classed as real property for purposes of taxation

which on general principle might be considered personal property (Standard Oil

Reference: Book IX, pp. 78-100

Co, of New York vs. Jaramillo, 44 Phil. 630, 633, cited in Caltex (Philippines)

Inc. vs. CBAA and City Assessor of Pasay City, G.R. No. 50466, May 31,

1982).

Since the law on real property taxation enumerates what are real

property for purposes thereto, there is no justification to resort to the Civil Code

(MSIC vs. BAA and Provincial Assessor of Laguna, CBAA Case No. 61, May 6,

1976).

Section 199(o) of RA 7160 defines “machinery” for purposes of real

property taxation thus –

“SEC. 199(O) – “Machinery” embraces machines, equipment, mechanical contrivances, instruments, appliances and apparatus which may or may not be attached, permanently or temporarily, to the real property. It includes the physical facilities for production, the installations and appurtenant service facilities, those which are mobile, self-powered or self-propelled, and those not permanently attached to the real property which are actually, directly and exclusively used to meet the needs of particular industry, business or activity and which by their very nature and purpose are designed for, or necessary to its manufacturing, mining, logging, commercial, industrial, or agricultural purposes.”

WHEREFORE, judgment is hereby rendered MODIFYING the decision

appealed from and:

1. Ordering the Provincial Assessor of Leyte and the Municipal

Assessor of Kananga, Leyte: (a) as allowed under Section 214 of RA 7160, to

recommend to, or make representations with, the Sangguniang Panlalawigan of

Leyte for the corresponding amendment of the Schedule of Fair Market Values,

subject matter of Resolution No. 609-93; and (b) accordingly, the revise or

amend the tax declarations effective 1994 for the subject eleven (11) parcels of

land, using the amount of P100.00, instead of P160.00, as the base unit value

or fair market value per square meter or said parcels of land, retroactive to

January 1, 1994; and

2. Declaring the revision of assessments on subject buildings and

other improvements (including machineries and equipment) made effective

1994 as NULL and VOID ab initio.

SO ORDERED.

Reference: Book IX, pp. 78-100

Manila, Philippines, October 3, 1998.

(Signed) MARGARITA G. MAGISTRADO
Chairman

(Signed)
ANGEL P. PALOMARES Member

(Signed) BENJAMIN M. KASALA
Member

Reference: Book IX, pp. 78-100