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

METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM,
Petitioner-Appellant,
CBAA CASE NO. L-103
-versus- (LBAA Case No. 08-03)
City of Pasay
THE LOCAL BOARD OF ASSESSMENT APPEALS OF PASAY CITY,
Appellee,

-and-

THE CITY OF PASAY, CONCEPCION C. DAPLAS, CITY TREASURER, AND ENGR. FERNANDO FANDIÑO, (OIC) CITY ASSESSOR,
Respondents-Appellees.
x———————————————-/

O R D E R

On August 30, 2012, this Board rendered a Decision in the above-entitled case dismissing Petitioner-Appellant’s Appeal for lack of merit.Not satisfied, Petitioner-Appellant seeks a reconsideration of said Decision.

The instant Motion for Reconsideration was sent by registered mail on September 27, 2012 and eventually reached this Board on October 3, 2012.

Alleging that it received a copy of the aforementioned Decision on September 12, 2012, Petitioner-Appellant states that the instant Motion is based on the following grounds, to wit:
1. The Honorable Board seriously erred in not declaring that MWSS is a government instrumentality and is exempt from payment of real property tax under Section 133(o) of Republic Act (R.A.) 7160.

2. The Honorable Board erred in not holding that the properties titled in MWSS’ name are properties of public dominion and, thus, are beyond the commerce of man.

3. The Honorable Board erred when it failed to take into consideration the damaging impact the assessment will have to the numerous beneficiaries of water supply within MWSS’ service area.

DISCUSSION

First Ground:
THE HONORABLE BOARD SERIOUSLY ERRED IN NOT DECLARING MWSS IS A GOVERNMENT INSTRUMENTALITY AND IS EXEMPT FROM PAYMENT OF REAL PROPERTY TAX UNDER SECTION 133(O) OF REPUBLIC ACT (R.A.) 7160.

Petitioner-Appellant’s Position, Arguments:

1. Petitioner MWSS is a government instrumentality as defined under Section 2(10) of Executive Order No. 292, otherwise known as “The Administrative Code of 1987”, and, therefore, local government units, as provided in Section 133(o), cannot assess and impose real property tax on it (MWSS), quoting the Supreme Court’s rulings in Basco v. PAGCOR (197 SCRA 52), in Manila International Airport Authority v. Court of Appeals (G.R. No. 18125, 20 July 2006, 495 SCRA 596) and in Philippine Fisheries Development Authority v. Court of Appeals (G.R. No. 169836, 31 July 2007, 528 SCRA 706);

2. Under Section 18(b) of R.A. 6234 (MWSS’ franchise), MWSS is exempt from realty taxes;

3. The rule on strict interpretation does not apply in the case of exemptions in favour of a government political subdivision or instrumentality (citing Cooley on the Law of Taxation, 4th edition, 1414 (1927), and the Supreme Court’s ruling in Maceda v. Macaraeg Jr. (G.R. No. 88291, 31 May 1991, 197 SCRA 771);

4. MWSS had been confirmed by R.A. 10149 as a government instrumentality;

CBAA’S RULING

As cited in the MIAA case, Section 2(10) of the Introductory Provisions of the Administrative Code provides:

“SEC. 2 General Terms Defined. – x xx

“(10) Instrumentality refers to any agency of the National Government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. This term includes regulatory agencies, chartered institutions and government owned or controlled corporations.”(Emphasis supplied).

Section 25, Chapter 6, Title V, Book IV of Executive Order No. 292 provides:
“Sec. 25. Attached Agencies and Corporation. – Agencies and corporations attached to the Department shall continue to operate and function in accordance with their respective charters/laws/executive orders creating them. Accordingly, Metropolitan Waterworks and Sewerage System, the Local Water Utilities Administration, the National Irrigation Administration, and the National Water Resources Council, among others, shall continue to be attached to the Department. xxx”(Emphasis supplied)

It would seem that both Section 2(10) of the Introductory Provisions of the Administrative Code and Section 25 of E.O. No. 292 were impliedly modified by R.A. 10149 which was signed into law by the President on June 06, 2011, Section 3(n) of which provides:

“Section 3.Definition of Terms. –

“x xx

“(n) Government Instrumentalities with Corporate Powers (GICP)/Government Corporate Entities (GCE) refer to instrumentalities or agencies of the government, which are neither corporations nor agencies integrated within the departmental framework, but vested by law with special functions or jurisdiction, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy usually though a charter including, but not limited to, the following: the Manila International Airport Authority (MIAA), the Philippine Ports Authority (PPA), the Philippine Deposit Insurance Corporation (PDIC), the Metropolitan Waterworks and Sewerage System (MWSS), the Laguna Lake Development Authority (LLDA), the Philippine Fisheries Development Authority (PFDA), the Bases Conversion and Development Authority (BCDA), the Cebu Port Authority (CPA), the Cagayan de Oro Port Authority, the San Fernando Valley Port Authority, the Local Water Utilities Administration (LWUA) and the Asian Productivity Organization (APO).” (Emphasis supplied)

Therefore, since Appellant is specifically mentioned in said Sec. 3(n) of R.A. 10149 as an instrumentality of the government, Appellant cannot be subject to local taxes, fees and charges by the LGUs, as provided under Section 133(o) of the LGC. This fact, however, is not relevant to or pertinent in this case. This case pertains not to local taxes, fees or charges, but to real property taxes, the payment of which Appellant is claiming exemption from.

Section 133(o) of R.A. 7160 deals in local taxes, fees and charges, NOT real property taxes.

On June 28, 1973, then President Ferdinand E. Marcos, in the exercise of his law-making powers, signed Presidential Decree (P.D.) 231 and promulgated the “Local Tax Code” which took effect on July 1, 1973. This “Local Tax Code” became, with certain modifications, the “Title One” of Book II of the LGC and is titled “LOCAL GOVERNMENT TAXATION” comprising Sections 128-196, inclusive, of the LGC.

On May 20, 1974, then President Marcos promulgated P.D. 464, the “Real Property Tax Code” which took effect on June 1, 1974. The “Real Property Tax Code”, also with some modifications, became “Title Two” of Book II of R.A. 7160, known as the “REAL PROPERTY TAXATION” comprising Sections 197-283, inclusive, of the LGC.

Section 5 of the Local Tax Code under PD 231, as amended by Section 2 of P.D. 426 which took effect upon its approval by then President Marcos on March 30, 1974, provides:

“Sec. 5. Common limitations on the taxing powers of local governments. The exercise of the taxing powers of provinces, cities, municipalities and barrios shall not extend to the imposition of the following:
xxx xxx xxx
“(o) Taxes of any kind on the national and local governments.”

The limitations on the taxing powers of the LGUs under said Sec. 5 of the Local Tax Code is now provided in Section 133(o) of the Local Government Taxation (Title One, Book II) of R.A. 7160, thus:

“SEC. 133. Common Limitations on the Taxing Powers of Local Government Units. Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following:

“xxx

“(o) Taxes, fees, or charges of any kind on the National Government, its agencies and instrumentalities and local government units.”

The provisions of Section 5(o) of the Local Tax Code under P.D. 231 and Section 133(o) of the Local Government Taxation under R.A. 7160 are “limitations” on the part of the LGUs to impose local taxes, fees and charges vis-à-vis the National Government, its agencies and instrumentalities. Conversely, the same provisions exempt the National Government, its agencies and instrumentalities from said local taxes, fees and charges.

On the other hand, the government’s exemption from real property tax was provided for under Section 40(a) of P.D. 464, the Real Property Tax Code, which stated:

“Sec. 40. Exemptions from Real Property Tax. — The exemption shall be as follows:
“(a) Real property owned by the Republic of the Philippines or any of its political subdivisions and any government-owned corporation so exempt by its charter: Provided; however, That this exemption shall not apply to real property of the abovenamed entities the beneficial use of which has been granted, for consideration or otherwise, to a taxable person.”

The said government’s exemption is now embodied under Section 234(a) of the LGC, thus:

“SEC. 234. Exemptions from Real Property Taxation. – The following are exempted from payment of the real property tax:

“(a) Real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person;”

As their titles imply, the “Local Tax Code” under P.D. 231 governed local government taxation, while the “Real Property Tax Code” (P.D. 464) governed real property taxation. While these two decrees were both in effect, no one ever thought that the provisions of P.D. 231 had any application to real property taxation, or that the provisions of P.D. 464 had any application to local government taxation. Since P.D. 231 was never intended to govern real property taxation cases, there is no reason why Title One, Book II of R.A. 7160 should now be made applicable to real property taxation.

Section 133(o) prohibits the LGUs from imposing local taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities and other LGUs. It may be argued that the phrase “charges of any kind” includes real property taxes. However, such interpretation would be stretching the meaning of the phrase too far.

If Section 133(o) is applicable not only to local taxes, fees and other charges, but also to real property taxes, the inclusion of Section 234(a) by the legislature in R.A. 7160 would have been an absurdity. In fact, it would have been unnecessary to include Title Two, Book II of R.A. 7160 (Real Property Taxation) since Title One, Book II (Local Government Taxation) of the same Code would have sufficed.

As in the Local Tax Code under P.D. 231, as amended, Chapter 2, Title One, Book II of the LGC specifically enumerates the local taxes, fees or charges which the LGUs may levy. Real property tax is neither mentioned anywhere in that chapter, nor in the entire Title One, Book II. Since, in the first place, no real property or owner thereof or person having legal interest therein is subject to real property tax under Title One, Book II of the LGC, there is, therefore, absolutely no reason why the National Government, its agencies and instrumentalities should be especially mentioned in Sec. 133(o) as immune from realty taxes.

The real property tax has always been imposed by the National Government, through the legislature. In contrast, local taxes, fees and other charges are imposed by the LGUs through their respective councils or sanggunians. The LGUs are charged certain functions under Real Property Taxation, like fixing the rates of real property taxes, but these functions are to be done within the parameters set in the law by the legislature. The LGUs are but administrators of the real property tax as provided under Sec. 200 of R.A. 7160.

Thus, the Supreme Court, in Benguet Corporation vs. Central Board of Assessment Appeals, et al. , ruled:
“Petitioner argues that realty taxes are local taxes because they are levied by local government units, citing Sec. 39 of P.D. 464, which provides:

‘Sec. 39. Rates of Levy. – The provincial, city or municipal board or council shall fix a uniform rate of real property tax applicable to their respective localities xxxx’

“While local government units are charged with fixing the rate of real property taxes, it does not necessarily follow from that authority the determination of whether or not to impose the tax. In fact, local governments have no alternative but to collect taxes as mandated in Sec. 38 of the Real Property Tax Code, which states:

‘Sec. 38. Incidence of Real Property Tax. – There shall be levied, assessed and collected in all provinces, cities and municipalities an annual ad valorem tax on real property, such as land, buildings, machinery and other improvements affixed or attached to real property not hereinafter specifically exempted.’

“It is thus clear from the foregoing that it is the national government, expressing itself through the legislative branch, that levies the real property tax. Consequently, when local governments are required to fix the rates, they are merely constituted as agents of the national government in the enforcement of the Real Property Tax Code. The delegation of taxing power is not even involved here because the national government has already imposed realty tax in Sec. 38 above-quoted, leaving only the enforcement to be done by local governments.

“The challenge of petitioner against the applicability of Meralco Securities Industrial Corporation v. Central Board of Assessment Appeals, et al. (199 Phil. 453; G.R. No. L-46245, May 31, 1982), is unavailing, absent any cogent reason to overturn the same. Thus –

‘Meralco Securities argues that the realty tax is a local tax or levy and not a tax of general application. This argument is untenable because the realty tax has always been imposed by the lawmaking body and later by the President of the Philippines in the exercise of his lawmaking powers, as shown in Sections 342 et seq. of the Revised Administrative Code, Act No. 3995, Commonwealth Act No. 470 and Presidential Decree No. 464.

‘The realty tax is enforced throughout the Philippines and not merely in a particular municipality or city but the proceeds of the tax accrue to the province, city, municipality and barrio where the realty taxed is situated (Sec. 86, P.D. No. 464). In contrast, a local tax is imposed by the municipal or city council by virtue of the Local Tax Code, Presidential Decree No. 231, which took effect on July 1, 1973 (69 O.G. 6197).’

“Consequently, the provisions of Sec. 52 of the Mineral Resources Development Decree of 1974 (P.D. 463), and Secs. 5 (m), 17 (d) and 22 (c) of the Local Tax Code (P.D. 231) cited by petitioner are mere limitations on the taxing power of local government units; they ARE NOT PERTINENT TO THE ISSUE BEFORE US AND, THEREFORE, CANNOT AND SHOULD NOT AFFECT THE IMPOSITION OF REAL PROPERTY TAX BY THE NATIONAL GOVERNMENT.” (Emphasis supplied)

Appellant’s realty tax exemption under its Charter had been withdrawn by R.A. 7160.

Appellant’s realty tax exemption under Section 18(b) of R.A. 6234 (MWSS’ franchise) had been withdrawn upon the effectivity of R.A. 7160 on January 01, 1992, the last paragraph of Section 234 of which provides:

“Except as provided herein, any exemption from payment of real property tax previously granted to, or presently enjoyed by, all persons, whether natural or juridical, including government-owned or –controlled corporations are hereby withdrawn upon the effectivity of this Code.” (Emphasis supplied)

The theory of liberal construction of exemption in favour of a government instrumentality does not apply in this case.

The rule that“strict interpretation does not apply in the case of exemptions in favour of a government political subdivision or instrumentality” is not pertinent in this case. Appellant’s claim for realty tax exemption is based on Section 133(o) of the LGC which applies only to Local Government Taxation (local taxes, fees and charges), not Real Property Taxation.

Second Ground:
THE HONORABLE BOARD ERRED IN NOT HOLDING THAT THE PROPERTIES TITLED IN MWSS’ NAME ARE PROPERTIES OF PUBLIC DOMINION AND, THUS, ARE BEYOND THE COMMERCE OF MAN.

Petitioner-Appellant’s Position, Arguments:

1. MWSS Properties are properties forming part of public dominion, citing Articles 419, 420 and 421 of the New Civil Code and the Supreme Court rulings in Manila International Airport Authority, supra, and Board of Assessment Appeals , Province of Laguna v. Court of Tax Appeals (G.R. No. L-18125, 8 SCRA 225 [1963]);

2. The State, being the source of the power to tax, its own properties cannot be presumed to be within the contemplation of any tax it imposes, citing SSS v. City of Bacolod, (15 SCRA 412, 417)

CBAA’S RULING

Petitioner’s properties are patrimonial properties and not part of public dominion. Thus, on pages 15-17 of its Comment to the instant Appeal , Respondents states:

“Petitioner’s properties subject of this case consist, among others, of lands and buildings titled under the name of its predecessor, the National Waterworks and Sewerage Authority (NWSA) and the Metropolitan Water District (MWD) as shown in the herein attached Transfer Certificates of Title marked as Annexes “11,” “12,” “13,” “14,” “15,” “16,” and “17”. Petitioner posits the view that being properties forming part of public dominion, the MWSS properties are undoubtedly properties which belong to the State or the Republic of the Philippines, with Petitioner MWSS merely holding such properties in trust on behalf of or for the benefit of the Republic of the Philippines, in accordance with its mandate to generate and provide water supply for Metro Manila and its environs (No. 18, Petition, p.7).

In Philippine Ports Authority vs. City of Iloilo , the Supreme Court said:

“Now before us, petitioner contradicts its earlier admission by claiming that the subject warehouse is a property of public dominion. This inconsistency is made more apparent by looking closely at what public dominion means. Tolentino explains this in this wise:
‘Private ownership is defined elsewhere in the Code; but the meaning of public dominion is nowhere defined. From the context of various provisions, it is clear that public dominion does not carry the idea of ownership; property of public dominion is not owned by the State, but pertains to the State, which as territorial sovereign exercises certain judicial prerogatives over such property. The ownership of such property, which has the special characteristics of a collective ownership for the general use and enjoyment, by virtue of their application to the satisfaction of collective needs, is in the social group, whether national, provincial, or municipal. Their purpose is not to serve the State as a juridical person, but the citizens; they are intended for the common and public welfare, and so they cannot be the object of appropriation, either by the State or by private persons.’ (2 A. TOLENTINO, COMMENTARIES AND JURISPRUDENCE ON THE CIVIL CODE 30 [1994], citing Manresa 66-69)

Following the above, properties of public dominion are owned by the general public and cannot be declared to be owned by a public corporation, such as petitioner.” (Emphasis supplied)

Moreover, the charter, per se, of the Petitioner-Appellant specifically provides that it shall own all waterworks and sewerage system in the territory and it shall have the power to acquire, purchase, hold, transfer, sell, lease, rent, mortgage, encumber, and otherwise dispose of real and personal property xxxx . The contention of Petitioner-Appellant that it merely holds these properties in trust is without any basis either in fact or in law. The titles to the real properties speak for themselves that they are under the full ownership and control of the Petitioner-Appellant, and not the Republic of the Philippines.

Besides, though the purpose for which the MWSS was created was impelled by public service, however, its services are accessible only to those who pay the required fees. It is thus apparent that the Petitioner-Appellant does not exist solely for public service and its services are not exclusively for public use. As held in the case of National Power Corporation vs. City of Cabanatuan :

“Section 2 of Pres. Decree No. 2029 classifies government-owned or controlled corporations (GOCCs) into those performing governmental functions and those performing proprietary functions, viz:

“A government-owned or controlled corporation is a stock or non-stock corporation, whether performing governmental or proprietary functions, which is directly chartered by special law or if organized under the general corporation law is owned or controlled by the government directly, or indirectly through a parent corporation or a subsidiary corporation, to the extent of at least a majority or its outstanding voting capital stock xxx.”(emphasis supplied)

Governmental functions are those pertaining to the administration of government, and as such, are treated as absolute obligation on the part of the state to perform while proprietary functions are those that are undertaken only by way of advancing the general interest of society, and are merely optional on the government. Included in the class of GOCCs performing proprietary functions are “business-like” entities such as the National Steel Corporation (NSC), the National Development Corporation (NDC), the Social Security System (SSS), the Government Service Insurance System (GSIS), and the National Water Sewerage Authority (NAWASA), among others.

Petitioner was created to “undertake the development of hydroelectric generation of power and the production of electricity from nuclear, geothermal and other sources, as well as the transmission of electric power on a nationwide basis.” Pursuant to this mandate, petitioner generates power and sells electricity in bulk. Certainly, these activities do not partake of the sovereign functions of the government. They are purely private and commercial undertakings, albeit imbued with public interest. The public interest involved in its activities, however, does not distract from the true nature of the petitioner as a commercial enterprise, in the same league with similar public utilities like telephone and telegraph companies, railroad companies, water supply and irrigation companies, gas, coal or light companies, power plants. Ice plant among others; all of which are declared by this Court as ministrant or proprietary functions of government aimed at advancing the general interest of society.” (Emphasis supplied)

Accordingly, the subject properties, being owned by Petitioner-Appellant, are not properties of public dominion.

Third Ground:
THE HONORABLE BOARD ERRED WHEN IT FAILED TO TAKE INTO CONSIDERATION THE DAMAGING IMPACT THE ASSESSMENT WILL HAVE TO THE NUMEROUS BENEFICIARIES OF WATER SUPPLY WITHIN MWSS’ SERVICE AREA.

Petitioner-Appellant’s Position, Arguments:

1. Should Pasay City be allowed to continue its unfounded and baseless assessment upon herein MWSS and be imposed the RPT, it will not be MWSS who shall stand to suffer the tremendous exactions being made by all the local government units in general, and the Pasay City in particular, but Metro Manila’s and other surrounding provinces’ residents within MWSS’s service area and jurisdiction.

CBAA’S RULING

The fear of the Petitioner-Appellant that the assessment made will cause undue damage to the public is more imaginary than real. At any rate, this Board’s quasi-judicial function is limited to the interpretation of what the law is on the case at bar, not what the law should be.

The 60-day period for appeals prescribed in Section. 226 of R.A. 7160 is mandatory and jurisdictional.

Section 206 of R.A. 7160 provides the procedure in claiming exemption from real property taxation, thus:

“SEC. 206. Proof of Exemption of Real Property from Taxation. – Every person by or for whom real property is declared, who shall claim tax exemption for such property under this Title shall file with the provincial, city or municipal assessor within thirty (30) days from the date of the declaration of real property sufficient documentary evidence in support of such claim including corporate charters, title of ownership, articles of incorporation, bylaws, contracts, affidavits, certifications and mortgage deeds, and similar documents.

“If the required evidence is not submitted within the period herein prescribed, the property shall be listed as taxable in the assessment roll. However, if the property shall be proven to be tax exempt, the same shall be dropped from the assessment roll.” (Emphasis supplied)

The thirty-day period prescribed under the first paragraph of above-quoted Section 206 is not absolute. As implied under the last sentence of the second paragraph of the same Section 206, a taxpayer may file with the assessor concerned a claim for tax exemption of his property, even beyond the thirty-day prescriptive period, but before the assessor makes an assessment on subject property and releases the written notice of such assessment. Once the assessment notice is released, the assessor loses jurisdiction over the assessment and he could no longer, among others, entertain claims for tax exemptionof subject property . The taxpayer’s recourse then would be to file an appeal with the LBAA under the provisions of Section 226.

At issue here is the interpretation of the provisions of Section 252 of the Local Government Code of 1991, which provides:

“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.

“(b) The tax or a portion thereof paid under protest shall be held in trust by the treasurer concerned.

“(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 his 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 subparagraph (a), the taxpayer may avail of the remedies as provided for in Chapter 3, Title Two, Book II of this Code.”

The Local Board should not have been concerned with the provisions of Section 252 of R.A. 7160. Under paragraph (a) above-quoted, it is the treasurer concerned – not the Local Board – who is prohibited from entertaining a taxpayer’s protest unless the latter first pays the tax under protest. Under said Section 252 of R.A. 7160, a taxpayer must first pay, under protest, the tax involved before filing with the treasurer concerned a claim for refund or tax credit thereof. It is only when his claim for refund or tax credit is denied by the treasurer, whether actually or constructively by failing to act on it, that the taxpayer may appeal such denial to the Local Board within sixty (60) days from receipt of said denial or from the date the sixty-day period prescribed in Sec. 252(a) expired without the treasurer acting on said claim.

Assessment is the function of the local assessor. The duty to collect the realty tax due on the assessment pertains to the local treasurer. Therefore, the provisions of Section 252 of the Code would only apply when the taxpayer believes that the assessment made by the assessor is satisfactory or correct, but that the treasurer’s computation of the tax due thereon is erroneous.

Naturally, if the taxpayer believes that the assessment made by the assessor is illegal or otherwise incorrect, his recourse would be to file an appeal with the Local Board under the provisions of Section 226 of the Code, with the assessor – not the treasurer – as respondent.

The determining factor as to which provision of the LGC applies – Section 226 or 252 – is the error perceived by the taxpayer in a given case. If the error complained of by the taxpayer is in the appraisal or valuation of the property and/or in its classification and determination of the applicable assessment level and/or in subjecting it to real property tax, the same perceived error would naturally be attributable to the assessor, in which case the appeal to the LBAA shall be filed within sixty (60) days from the date of receipt of the written notice of assessment.

If, on the other hand, the error perceived by the taxpayer is in the rates of the taxes due or otherwise in the computation of the taxes due, the error is attributable to the treasurer, in which case Section 252 applies.

The real purpose of Petitioner’s “letter protest” (to the treasurer) was to assail or question the action made by the Respondent City Assessor in not exempting Petitioner’s real properties from real property tax. As aforesaid, Petitioner’s course of action should have been to file an appeal with the Local Board within sixty (60) days from receipt of the written notice of assessment. But which written notice of assessment? The “notice” which Petitioner called the “Notice of Assessment” received by Appellant on February 21, 2008 from Respondent City Treasurer was actually a “Statement of Account” of the realty taxes due for the calendar year 2008.

In paragraph 1 of its instant Motion, MWSS stated that “the questioned Decision dealt solely with the procedural lapses attendant in the filing of the Protest” and that “The late filing of the protest was because the “instrumentality doctrine” had just been decided upon by the Supreme Court sometime before the filing of the Protest.”

While chiding this Board, MWSS admits that its “protest”, albeit not the correct course of action, was filed late but justified its action with the “late arrival” of the Supreme Court’s decision on what MWSS called the “instrumentality doctrine”.

We agree with Petitioner-Appellant that Rules of Procedure should be liberally construed to the end that substantial justice may be served.Technical rules of procedure should be used to promote, not frustrate justice .

In a number of cases, however, the Honorable Supreme Court set the conditions when the rules of procedure may not be unduly relaxed, thus:

“The liberal construction of the Rules of Court is resorted to only to promote substantial justice, not to delay or undermine the legal processes. The Rules are designed to assure the orderly and predictable course of justice. Unduly relaxing them would be an injustice to the innocent parties who honor and obey them, and unfairly reward those who neglect or fail to follow them.” (Boaz International Trading Corporation and F. R. Cement Corporation vs. Woodward Japan, Inc. and North Front Shipping Services, Inc., G.R. No. 147793, December 11, 2003.)

“Rules of procedure must be followed except only when, for persuasive reasons, they may be relaxed to relieve a litigant of an injustice commensurate with his failure to comply with the prescribed procedure. Concomitant to a liberal application of the rules of procedure should be an effort on the part of the party invoking liberality to adequately explain his failure to abide by the rules.” (Cresenciano Duremdes vs. Agustin Duremdes, G.R. No. 138256, November 12, 2003.)

“Rules of procedure are intended to insure the orderly administration of justice and the protection of substantive rights in judicial and extra-judicial proceedings. It is a mistake to suppose that substantive law and adjective law are contradictory to each other or, as has often been suggested, that enforcement of procedural rules should never be permitted if it will result in prejudice to the substantive rights of the litigants. This is not exactly true; the concept is much misunderstood. As a matter of fact, the policy of the courts is to give effects to both kinds of law, as complimenting each other, in the just and speedy resolution of the dispute between the parties. Observance of both substantive rights is equally guaranteed by due process whatever the source of such rights, be it the constitution itself or only a statute or a rule of court.” (Limpot v. Court of Appeals, 170 SCRA 367 [1989]; Lim Tupaz v. Court o Appeals, G.R. No. 89571, Feb. 6, 1991, 193 SCRA 597; Santos v. Court of Appeals, G.R. No. 92862, July 04, 1991, 198 SCRA 806; Sps. Ruben and Luz Galang v. Court of Appeals, G.R. No. 76221, July 29, 1991, 199 SCRA 683; cited in Herrera, Remedial Law, 2000 Ed., p. 277).

“Strict observance of the Rules indispensable to the prevention of needless delays and to the orderly and speedy dispatch of judicial business is an imperative necessity.”(Manila RR Co. v. Attorney General, 20 Phil. 523; cited in Herrera, Remedial Law, 2000 Ed., p. 278)

By its own admission, MWSS had been paying realty taxes since the year 2002. The records do not show that Petitioner ever made an appeal under the provisions of Section 226 of the LGC.

Settled is the principle that the requirement regarding the perfection of appeals within the reglementary period is not only mandatory but also jurisdictional .

The collection of taxes should not be left to uncertainty for an indefinite period of time. As the Honorable Supreme Court said in Jose B.L. Reyes, et al. v. Pedro Almanzor, et al. , “Verily, taxes are the lifeblood of the government and so should be collected without unnecessary hindrance.”

WHEREFORE, premises considered, the instant Motion for Reconsideration is DENIED for lack of merit.

SO ORDERED.

Manila, Philippines, February 27, 2013.

SIGNED
OFELIA A. MARQUEZ
Chairman

SIGNED SIGNED
ROBERTO D. GEOTINA CAMILO L. MONTENEGRO
Member Member