Republic of the Philippines
CENTRAL BOARD OF ASSESSMENT APPEALS M a n I l a

MR. EDUARDO T. RODRIQUEZ, Petitioner-Appellant,
CBAA CASE NO. V-25 – versus –

THE CITY ASSESSOR OF LA CARLOTA CITY,
Respondent- Appellee,

– and –

THE LOCAL BOARD OF ASSESSMENT APPEALS OF LA CARLOTA CITY,
Appellee.
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R E S O L U T I O N

This Appeal, received by this Board in Manila on August 22, 2006, is from

the Order in an unnumbered case made by the Local Board of Assessment

Appeals of the City of La Carlota (the “Local Board”) on July 3, 2006, the

dispositive portion of which reads as follows:

“WHEREFORE, based on the foregoing provision of law and ruling of the Central Board of Assessment Appeals, this Honorable Board could not proceed with the hearing of petition unless the tax due is paid by the Petitioner.”

Alleging that he received a copy of the said Order on July 10, 2006,

Petitioner-Appellant submits the following:

“ISSUES TO BE RESOLVED:

“1. Whether or not the re-assessment on the subject property by the City Assessor of La Carlota City is illegal; and

“2. Whether of not payment under protest should be made a condition precedent for the existence of the right of herein Appellant to question the assessments made by the City Assessor of La Carlota before the Local Board of Assessment Appeals.”

This Board could not discuss the merits of the first issue since the Local

Board, in its Order appealed from, chose not to hear the petition before it.

On the second issue, Petitioner-Appellant argues that “since the assailed

assessments are illegal, the same are void and cannot attain finality. The Local

Reference: Book XIII, pp. 109-117

Government Code, particularly Sec. 226, chapter 3 on Assessment Appeals, or

its implementing rules and regulations do not provide as condition precedent the

payment of tax questioned before the Local Board of Assessment Appeals.”

On the other hand, the Local Board contends that, under the provisions of

Section 252 of RA 7160, otherwise known as the Local Government Code of

1991, the petitioner should first pay the tax due before the Local Board may hear

said petition. Section 252 provides as follows:

“SEC. 252. Payment Under Protest. – (a) No protest shall be entertained unless the taxpayer first pays 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 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 of

the Code 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 protest in writing to the treasurer within thirty (30)

days from payment, and Fourth: That the treasurer denied, in writing, the claim

for tax credit of refund, or did not act on the claim within sixty (60) days after the

date the protest 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 Local Board of

Assessment Appeals of La Carlota City acted as the City Treasurer of La Carlota

City in refusing to hear the appeal, invoking as it does, Section 252 of RA 7160.

The two petitions, dated November 30, 2005 and March 9, 2006, filed by

Petitioner Eduardo T. Rodriquez with the Local Board clearly state that the

Reference: Book XIII, pp. 109-117

appeal to the Local Board is from the action of the assessor inn the assessment

on the petitioner’s poultry site. The provisions of the Code which is applicable in

this case is not Section 252, but Section 226, thus:

“Section 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.” (Emphasis supplied)

The Local Board cited 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.” In the said case, this Board said in part:

“(a) the term ‘assessment’ is defined in Section 3 of PD 464 as ‘the act or process of determining the value of a property or properties subject to tax, including the discovery, listing and appraisal of properties’. Thus the action of the assessor in classifying the properties as real becomes subject to appeal under the cited provision of law (PD 76), and consequently subject to the requirement in the same provision that the appeal shall not suspend the collection of the corresponding real property taxes. The general principle alluded to by the appellant that the payment of the tax is a condition precedent to judicial relief does not apply to the present appeal as it is not a suit in court but merely part of an administrative process.”

Presidential Decree No. 76, referred to above, 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 of 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 assessment of real property made under the provisions of this Code

Reference: Book XIII, pp. 109-117

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 wrong under the present law.

Note that Section 54 o CA 470, the law in force before PD 76, expressly

and specifically prohibits any court from ascertaining any suit assailing the

validity of a tax assessed under said Act until the taxpayer shall have paid, under

protest, the taxes assessed against him, thus:

“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, nor shall any court declare any tax invalid by reason of . . .”

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 real property 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

such collection.

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

Reference: Book XIII, pp. 109-117

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 209-227, March 31, 1971), 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 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, that action challenging the assessment, after first exhausting the administrative remedy of appeal to the assessment 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 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 . . .” (Emphasis supplied)

The aforequoted case was governed by Republic Act 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 RA 1125.” (Board of Assessment Appeals of Zamboanga del Sur vs. Samar

Mining Co., Inc., supra).

We believe, therefore, and so hold, that the Local Board erred in refusing

to hear the appeal for lack of prior payment of taxes on the questioned

assessment.

WHEREFORE, the Secretary of this Board is hereby instructed to remand

the complete records of this case, together with a copy of this Resolution, to the

Local Board of Assessment Appeals of La Carlota City. The same Local Board is

hereby ORDERED to hear petitioner’s appeal thereat on its merits, without

requiring Mr. Eduardo T. Rodriquez to first pay the taxes on the questioned

assessment.

Reference: Book XIII, pp. 109-117

SO ORDERED.

Manila, Philippines, October 04, 2006.

(Signed) CESAR S. GUTIERREZ
Chairman

(Signed)
ANGEL P. PALOMARES Member

(Signed) RAFAEL O. CORTES
Member

Reference: Book XIII, pp. 109-117