Republic of the Philippines
Department of Finance
CENTRAL BOARD OF ASSESSMENT APPEALS
7th Floor, EDPC Bldg., BSP Complex
Roxas Boulevard, Manila

NATIONAL POWER CORPORATION,
Petitioner-Appellant,
CBAA CASE NOS. L-26 & L-26A
-versus- (LBAA Case No. 98-1)

LOCAL BOARD OF ASSESSMENT APPEALS OF THE PROVINCE OF BATAAN,
Appellee,

-and-

PASTOR P. VICHUACO, Provincial Treasurer, of Bataan, HERMENEGILDO C. PILAPIL, Provincial Assessor of Bataan and RODOLFO C. GOMEZ, Municipal Assessor of Limay, Bataan,
Respondents-Appellees.
x——————————————-/

O R D E R

On May 17, 2012, this Board rendered a Decision in the above-entitled case. Not satisfied, Petitioner-Appellant National Power Corporation (“NPC”) filed this instant Motion for Partial Reconsideration.
Alleging that it received a copy of the assailed Decision on June 27, 2012, Petitioner-Appellant sent said Motion dated July 9, 2012 by registered mail on July 10, 2012. The said motion eventually reached this Board on July 17, 2012.

Petitioner-Appellant submits the following grounds/arguments:
“I. The Honorable Board erred in holding that NPC “can no longer question the assessment made on its property by the assessor concerned” and that it can “question the treasurer, not on the assessment but on the implementation thereof.

”II. The Honorable Board erred in holding that NPC “did not adduce evidence against the action of the treasurer” but “[i]nstead it proceeded against the action of the assessor which is not under appeal.

”III. With utmost humility, the Honorable Board misapplied the doctrine laid down in Ty vs. Trampe case.

”IV. A ruling by the Honorable Board on the “excessiveness” (or “reasonableness”) issue of the subject real property taxes is not an attack per se on the assessment.

“DISCUSSION/ARGUMENTS

“I. The Honorable Board erred in holding that NPC “can no longer question the assessment made on its property by the assessor concerned” and that it can “question the treasurer, not on the assessment but on the implementation thereof.”

“3. As discussed in the assailed Decision, the earlier ruling of the LBAA (dismissing NPC’s Petition before the LBAA for having been filed out of time) was set aside by this Honorable Board in its Resolution dated September 17, 2003.

“4. In said Resolution, this Honorable Board categorically ruled that NPC “questioned the excessiveness of the assessment and the amount of tax imposed on its properties. Hence Petitioner-Appellant (NPC) is entitled to Appeal before the Local Board of Assessment Appeals under Sec. 252 of R.A. 7160, after having ‘paid under protest’ the corresponding taxes thereto.” (Par. 2, Page 4 of the assailed Decision dated May 17, 2012.)

“5. In fact, from the same Resolution, this Honorable Board stated that “[h]earing of the case on the merits will be on October 7, 2003, the parties are hereby ordered to act accordingly.” (Ibid.)

“6. From this Resolution, it is apparent that this Honorable Board gave NPC an opportunity to present its case on the merits, specifically, to show the excessiveness of the assessment and the amount of tax imposed on its properties. (Underscoring supplied)

“7. These are the very subjects allowed by this Honorable Board in its Resolution allowing the Appeal of NPC to proceed to determine the “excessiveness of the assessment and the amount of tax imposed on its properties.”
“8. In fact, this Honorable Board recognized the numerous evidence presented by NPC to show the “excessiveness of the assessment and the amount of tax imposed on its properties” specifically:

“i. Audited Financial Statement duly certified by the Commission on Audit;
“ii. Sworn Declaration of the value of the subject property;
“iii. Itemized fixed assets report; and
“iv. Independent Appraisal Report conducted by a third party.

“9. On the other hand, and as found by this Honorable Board, “Respondent-appellees never submitted any basis to substantiate their allegation that Three Billion Pesos is the fair market value of the subject real properties.”(Par. 2, Page 7, id.)

“10. In all fairness, the Appellee LBAA of Bataan, by agreement, even directed the Provincial and Municipal Assessors on October 12, 1999 to submit a revised assessment on the real property tax of NPC. Sadly, the Respondents-appellees failed to comply with this agreement.

“11. It can be reasonably deduced that this Honorable Board allowed NPC to proceed with the trial on the merits to show why the taxes imposed by the Respondents-appellees are excessive.

“12. True enough, NPC complied with this requirement as it submitted numerous proofs to show why the taxes imposed are excessive.

“13. Evidently, the findings in the assailed Decision that NPC “can no longer question the assessment made on its property by the assessor concerned” and that it can “question the treasurer, not on the assessment but on the implementation thereof” defeats, with all due reverence, all principles of justice and fair play.

“14. To be clear, NPC’s Appeal, which was initially ruled upon by the Appellee LBAA to have been filed out of time, was allowed by this Honorable Board to proceed with the trial on the merits. This Honorable Board proceeded to hear the instant Appeal of NPC on the merits and allowed the presentation of evidence of both parties.

“15. What then are the subjects of the Appeal of NPC that was allowed by this Honorable Court to proceed? To answer that question, the September 17, 2003 Resolution of this Honorable Board may be resorted to wherein it was categorically ruled that NPC questioned the “excessiveness of the assessment and the amount of tax imposed on its properties.”

“16. As such, the subjects of the Appeal of NPC on the merits were: (1) the excessiveness of the assessment; and (2) the excessiveness of the amount of tax imposed on its properties.

“17. At the risk of sounding repetitious, this Honorable Court allowed the parties to proceed with the trial on the merits to determine whether or not (1) the assessment is excessive; and (2) the amount of tax imposed is excessive.

“18. Such Resolution of this Honorable Board allowing NPC to present its evidence on the excessiveness of the assessment is not hard to fathom for the same coincides with all the principles laid down by the Local Government Code under the fundamental principles of real property taxation.

“19. Thus, if there is a violation of these principles like in the instant case, specifically that “[r]eal property shall be appraised at its current and fair market value,” this Board is not without any power to strike down this apparent injustice committed by the Respondents-appellees.

“20. Verily, Respondents-appellees never even lifted a finger to show why Three Billion Pesos is allegedly the fair market value of the subject real properties. As found by this Honorable Board, “Respondents-appellees never submitted any basis to substantiate their allegation that P3Billion is the fair market value of the subject real properties.”

“21. It may not be amiss to point out that in entertaining the Appeal of NPC and allowing the same to proceed on the merits, this Honorable Board gave NPC a reasonable opportunity to show why the assessment and the amount of tax imposed are excessive.

“22. By this grant of opportunity, this Honorable Board cannot now, with all due respect, completely disregard all the evidence presented by NPC under the guise that it has already lost its right to question the assessment.

“23. Nevertheless, the act of this Honorable Board in allowing the Appeal of NPC to proceed may be taken in consonance with Section 206 of the Local Government Code. Section 206 allows a taxpayer to subsequently request for exemption in this wise:

‘xxx

‘If the required evidence is not submitted within the period herein prescribed (within thirty [30] days from the date of the declaration of real property), the property shall be listed as taxable in the assessment roll. However, if the property shall be proved to be tax exempt, the same shall be dropped from the assessment roll.’

“24. It is clear from this provision that if the property is in reality tax exempt, the taxpayer is not prevented from proving that fact even beyond the period prescribed therefor which is within thirty [30] days from the date of the declaration of real property.

“25. By analogy, taking into consideration the intent of the law to allow subsequent request for exemption, this Honorable Board in its September 17, 2003 (sic) did not violate any provision of law when it allowed NPC to present proof showing the excessiveness of the assessment and the amount of tax imposed on its properties.

“26. What it important is that, at the end of the day, true intent of the law as stated in the fundamental principles of the Local Government Code is followed, that is, “[r]eal property shall be appraised at its current and fair market value.”

“27. Sans any doubt, NPC was able to show after hearing on the merits that the assessment and the amount of tax imposed on its properties are excessive in violation of this afore-quoted avowed principle in real property taxation.

“28. To say now that NPC had already lost its right to question the assessment would be to cling to too much technicality to defeat the very ends of justice.

“29. With all due deference, this Honorable Board must be reminded that its very own Rules of Procedure mandates a liberal construction thereof so as to ascertain the speedy resolution of cases brought before it. Thus, Section 1 (Construction), Rule I of the Rules of Procedure Before the Central Board of Assessment Appeals categorically states that:

‘These rules shall be liberally construed in order to promote their objectives and to assist the parties in obtaining just, speedy and inexpensive determination of every action relative to the real property assessment and collection of realty tax pursuant to the Local Government Code and other related assessment laws.’

“30. Withal, Philippine jurisprudence likewise tilts in favor of substantial justice over procedural laws. No procedural rule is sacrosanct if such shall result in subverting justice. The Supreme Court has the power to except a particular case from the operation of the rule whenever the purposes of justice requires it because what should guide judicial action is that a party is given fullest opportunity to establish the merits of his action or defense rather than for him to lose life, honor, or property on mere technicalities. (PCIB vs. Cabrera, 454 SCRA 792)

“31. What should guide judicial action is the principle that a party-litigant is to be given the fullest opportunity to establish the merits of his complaint or defense rather than for him to lose his life, liberty, honor, or property to technicalities. (Metro Rail Transit corporation vs. Court of Tax Appeals, 470 SCRA 563)

“32. Just recently, the Supreme Court in the case entitled” “Luz R. Yamane, in her capacity as City Treasurer of Makati City, versus BA Lepanto Condominium Corporation, (G.R. No. 154993, October 25, 2005) disregarded rules of procedure to check the whimsical exercise of a local government unit’s taxing power in this wise, viz:

‘Petitioner City Treasurer of Makati, Luz Yamane (City Treasurer), presents for resolution of this Court two novel questions: one procedural, the other substantive, yet both of obvious significance. The first pertains to the proper mode of judicial review undertaken from decisions of the regional trial courts resolving the denial of tax protests made by local government treasurers, pursuant to the Local Government Code. The second is whether a local government unit can, under the Local Government Code, impel a condominium corporation to pay business taxes.

‘While we agree with the City Treasurer’s position on the first issue, there ultimately is sufficient justification for the Court to overlook what is essentially a procedural error. We uphold respondents on the second issue. Indeed, there are disturbing aspects in both procedure and substance that attend the attempts by the City of Makati to flex its taxing muscle. Considering that the tax imposition now in question has utterly no basis in law, judicial relief is imperative. There are fewer indisputable causes for the exercise of judicial review over the exercise of the taxing power than the tax is based on whim, and not on law.’ (emphasis ours)

“33. Had the Honorable Board been liberal enough to set aside procedural defects and continued to resolve the case based on its merits, it should have surely and readily ruled that the real property taxes assessed/imposed against NPC are indeed excessive.

“34. If this Honorable Board closes its eyes now on the overwhelming evidence submitted by NPC to show excessiveness of the taxes assessed and imposed, it would violate basic tenets on due process and completely disregard the fundamental principle in real property taxation as stated in the Local Government Code that ‘[r]eal property shall be appraised at its current and fair market value.’

“35. All told, the Honorable Board erred in holding that NPC “can no longer question the assessment made on its property by the assessor concerned” and that it can “question the treasurer, not on the assessment but on the implementation thereof.”

“II. The Honorable Board erred in holding that NPC “did not adduce evidence against the action of the treasurer” but “[i]nstead it proceeded against the action of the assessor which is not under appeal.

“36. As previously discussed, by allowing the trial on the merits to proceed, this Honorable Board gave NPC an opportunity to show why the assessment and the amount of tax imposed on its properties are excessive.

“37. Thus, to hold now that NPC “did not adduce evidence against the action of the treasurer” but “]i]nstead it proceeded against the action of the assessor which is not under appeal” will plainly, with utmost humility, violate cardinal principles of justice and fair play.

“38. Be that as it may, even if we assume that NPC had already lost its right to question the assessment, NPC was permitted by this Honorable Court in its Resolution dated September 17, 2003, to show why the assessment and the amount of tax imposed by the Respondents-appellees on its properties are excessive.

“39. To this date, such Resolution has not been the subject of any appeal or petition filed by the Respondents-appellees. Perforce, such Resolution granting NPC an opportunity to submit proof cannot just be simply disregarded for to do so would violate elementary principles of justice and fair play.

“40. On the question of what the word “excessiveness” covers, the same includes anything “exceeding what is usual, proper, necessary, or normal.”

“41. In order to show this Honorable Board that the subject real property taxes are excessive, NPC presented several pieces of evidence to show the usual, proper, necessary and normal fair market value of the subject properties.

“42. It may be proper to emphasize that you only can show “excessiveness” if you first show what is usual, proper, necessary and normal or, in other words, the true and correct fair market value of the properties.

“43. Was NPC able to provide proof of the true and correct value of the subject properties? The answer is in the affirmative. This Honorable Board, to repeat, recognized the proof submitted by NPC as follows:

“i. Audited Financial Statement duly certified by the Commission on Audit;
“ii. Sworn Declaration of the value of the subject property;
“iii. Itemized fixed assets report; and
“iv. Independent Appraisal Report conducted by a third party.

“44. Apparently, NPC provided proof to show the “excessiveness” of the subject real property taxes to warrant the revision of the correct fair market value of the real properties involved.

“45. To separate these functions of the assessor and the treasurer in the case at bar on the determination of the excessiveness of the subject real property taxes would be to defeat on a mere technicality an otherwise valid, just and correct presentation of the fair market value of the properties as submitted by NPC.

“46. Hence, considering that NPC presented several pieces of evidence to show the excessiveness of the subject real property taxes, the Honorable Board erred in holding that NPC “did not adduce evidence against the action of the treasurer” but “[i]nstead it proceeded against the action of the assessor which is not under appeal.”

“III. With utmost humility, the Honorable Board misapplied the doctrine laid down in Ty vs. Trampe case.

“47. To be candid, the primary issue of the Ty vs. Trampe case (500 SCRA 519) is whether or not going to the courts directly without availing of the administrative remedies provided for in Section 252 in relation to Section 226 of the Local Government Code is proper. Thus, such issue deals more with exhaustion of administrative remedies.

“48. In any event, the Supreme Court categorically stated (and as quoted by this Honorable Board) that “the protest contemplated under Sec. 252 of R.A. 7160 is needed where there is a question as to the reasonableness of the amount assessed. Hence, if a taxpayer disputes the reasonableness of an increase in a real estate tax assessment, he is required to ‘first pay the tax’ under protest. Otherwise, the city or municipal treasurer will not act on his protest. In the case at bench however, the petitioners are questioning the very authority and power of the assessor, acting solely and independently, 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 very validity of any increase.” (Emphasis supplied)

“49. To correctly apply the doctrine laid down in the Ty vs. Trampe case in the instant case, one must first determine what the subject matters of the Appeal are. Is it to question the “legality” of the tax imposition or is it to question the “reasonable” (sic) of the same?

“50. The answer to this question can be directly found in the September 17, 2003 Resolution of this Honorable Board which stated that NPC “questioned excessiveness of the assessment and the amount of tax imposed on its properties. Hence, the Petitioner-Appellant (NPC) is entitled to Appeal before the Local Board of Assessment Appeals under Sec. 252 of R.A. 7160, after having ‘paid under protest’ the corresponding taxes thereto.”

“51. In other words, NPC is questioning not the legality of the subject real property taxes on its properties but its “reasonableness” (or for that matter its “excessiveness”). For such purpose alone, NPC was correct in seeking remedy before the LBAA and, thereafter, this Honorable Board.

“52. Naturally, one can only determine if the subject real property taxes are “reasonableness” (sic) if it is shown, first and foremost, what is reasonable. Thus, after it is shown what is reasonable, then one may already conclude whether the taxes assessed and imposed in the case at bar are excessive.

“53. Thus, because NPC is questioning the “reasonableness” of the real property (sic) assessed and imposed, the doctrine laid down in the Ty vs. Trampe case was obviously misapplied, with due respect, by this Honorable Board as NPC correctly availed of the administrative remedies provided for in Sec. 252 in relation to Section 226 of the Local Government Code to question the “excessiveness” of the subject real property taxes.

“54. If at all, the Ty vs. Trampe case can be applied to validate the action of NPC in going to the LBAA and, thereafter, before this Honorable Board to show that the taxes assessed and imposed on the subject properties are not “reasonable” or, for that matter, are clearly “excessive.”

“55. To apply the Ty vs. Trampe case in the Appeal of NPC in such a way that it would defeat the very purpose of such ruling (that the proper administrative remedy to question the “reasonableness” of the real property taxes is that provided for in Section 252 in relation to Section 226 of the Local Government Code) would be to go against the very doctrine laid down by the High Tribunal in said case.
“56. To buttress this position, the Ty vs. Trampe case speaks of “reasonableness” in availing of the administrative remedies provided for in Section 252 and, thereafter, Section 226 of the Local Government Code.

“57. Had the Supreme Court believed that a taxpayer can no longer question the “reasonableness” of the real property taxes imposed under Section 252 then it would have easily and readily said so. Instead, the High Tribunal used the word “reasonableness” to describe the matter that may put to issue in Section 252 in relation to Section 226 of the Local Government Code.

“58. “Reasonableness” (or its root word reasonable) is defined by Merriam-Webster as something “not extreme or excessive.” Clearly, then, NPC was correct in availing of the administrative remedy provided for in Section 252 of the Local Government Code when it questioned the subject real property taxes for being “excessive.”

“59. As (sic) the risk of sounding like a broken record, in order to determine “reasonableness” or “excessiveness,” the taxpayer has no other recourse except to present evidence to show the reasonable (sic) fair market value of the property. A recourse that NPC availed of when it presented overwhelming evidence to show the true and correct fair market value of the properties.

“60. In fact, this Honorable Board even allowed NPC to present evidence to show the “excessiveness” of the real property taxes involved in its Resolution dated September 17, 2003. At that point, this Honorable Board correctly ruled in favor of NPC, a ruling that is in full accord with the doctrine laid down in the Ty vs. Trampe case.

61. Surely, it would be, with all due deference, a disaster of some sorts if NPC’s submitted evidence will now be disregarded by this Honorable Board on a mere technicality by misapplying the Ty vs. Trampe ruling. Evidently, NPC has produced overwhelming evidence to show the true and correct fair market value of the properties which this Honorable Board should not close its eyes to.

“62. To this end, and with utmost humility, the Honorable Board misapplied the doctrine laid down in Ty vs. Trampe case.

“IV. A ruling by the Honorable Board on the “excessiveness” (or “reasonableness”) issue of the subject real property taxes is not an attack per se on the assessment.

“63. It may be recalled that Section 252 of the Local Government Code provides for a remedy in case its Protest is denied or not acted upon, and that is, to avail of the remedies provided for under Section 226 or an appeal before the Local Board of Assessment Appeals.

“64. It can, then, be reasonably deduced that the Local Government Code still provided a remedy to question the “reasonableness” or the “excessiveness” of the real property taxes imposed by going before the LBAA and, thereafter, this Honorable Board.

“65. It may not be totally absurd to note that such determination of “reasonableness” or “excessiveness” is not entirely an attack per se on the assessment because the LBAA and this Honorable Board are lawfully permitted to discuss the “reasonableness” issue without putting at risk the authority of the assessor to assess the subject properties.

“66. Phrased simply, the “reasonableness” or “excessiveness” of the taxes imposed can be directly attacked without going into the authority of the assessor to assess real property taxes on the subject properties.

“67. Once it is determined that the real property taxes are indeed “excessiveness” (sic) (or not “reasonableness”), a mere Order can be issued directing a re-computation of the taxes (based on the true and correct fair market value of the property) and a refund therefor be granted by the treasurer in favor of NPC.

“68. This, in fact, is the situation when this Honorable Board, in the herein assailed Decision, granted a re-computation of the real property taxes imposed against NPC, taking into consideration the depreciation allowance for the subject properties pursuant to Section 225 of the Local Government Code in this wise:

‘xxx However, since there are accrued depreciations on the property, the treasurer concerned is hereby ordered to take full consideration thereof for Petitioner-Appellant (NPC).

‘xxx”

“69. As such, it is legally permitted, as this Honorable Board already did so for the depreciation allowance, to re-compute the real property taxes of NPC without directly attacking the authority to assessment (sic) the subject properties for real property taxes.

“70. Therefore, it is clear that a ruling by this Honorable Board on the “excessiveness” (or “reasonableness”) issue of the subject real property taxes is not an attack per se on the assessment.

“71. In the light of the foregoing discussions and in the higher interest of substantial justice, this Honorable Board has no other recourse save to partially reconsider the assailed Decision and to grant all the prayers of NPC in its two (2) Appeals for the instant controversy dated April 14, 1998 and December 18, 2000.”

BRIEF HISTORY OF THE CASE

1. In a letter dated October 18, 1996 addressed to the VP and General Manager of NPC (a copy of which letter was received by NPC’s MMRC on October 21, 1996), the Municipal Assessor of Limay, Bataan stated:

“This is to serve notice of the revision of real property assessment made on the properties of National Power Corporation located at the Bataan Combine Cycle Power Plant in this municipality which shall take effect in 1997, subject to back taxes from 1994-1996 exclusive of penalties as may be determined by our Municipal Treasurer.

“The hereto attached owners copy of Tax Declaration and the imposed market valuation is arrived and based on the actual costs, including site development currently spent considerably for the project.

“We are enclosing herewith the Real Property Tax Order of Payment and anticipating that this will be given preferential attention and due consideration as we are looking your Corporation, our true partner in the economic making of Limay, a premier town.”

2. In a letter dated October 23, 1996 , NPC acknowledged the Municipal Assessor’s letter of October 18, 1996, informing the Municipal Assessor that, as early as January, 1996 NPC declared subject properties for taxation purposes before the Provincial Assessor of Bataan and suggested a meeting between the Assessor and NPC’s lawyer, where NPC’s said declaration may be considered by the Municipal Assessor.

3. In a letter dated November 04, 1996 , the Municipal Assessor welcomed the proposed meeting between him and NPC’s lawyer.

4. On November 15, 1996, Petitioner NPC, through its Metro Manila Regional Center Officer-In-Charge, Mr. A. O. Nerona, wrote a letter , addressed to the Provincial Treasurer of Bataan, Mr. Pastor P. Vichuaco, copy furnished the Municipal Assessor of Limay, Bataan, Mr.Rodolfo C. Gomez, the body of which letter states:

“This is to formally protest our payment of real property taxes on certain properties of the National Power Corporation (NPC) in Limay, Bataan.

“On October 21, 1996, we received Tax Declaration Nos. 13137,13138,13139 and 13140 for the machineries, buildings and other improvements of NPC in Bataan Combined Cycle Power Plant which are broadly identified in the said Tax Declarations under Property Index Nos. 018-06-006-08-006-B-1, 018-06-006-08-066-B-2, 018-06-006-08-066-M-1 and 018-06-006-08-066-M-2 respectively. Accompanying the tax declarations are the Order of Payment for the Real Property Taxes due for those properties which the Municipal Assessor considered as taxable. For ready reference, we have attached hereto copies of the aforesaid tax declarations together with the order of payment and marked herein as Annexes “A” to “A-3” and “B” to “B-2”.

“Pursuant to law and as prerequisite to making a protest, on November 8, 1996, NPC paid under the protest a portion of the tax being collected in the amount of P8,160,000.00. This is evidenced by Official Receipt No. 6578958 issued by the Office of the Provincial Treasurer, copy of which is attached hereto as Annex “C”. Further, on November 11, 1996, NPC paid the balance in the amount of P12,213,114.90. This is evidenced by Official Receipt No. 6578959 and 6578960 issued by the Provincial Treasurer, copies of which are attached hereto as Annexes “D” and “D-1”.

“This protest is lodged because the assessments on the properties of NPC subject hereto (sic) were made by the Municipal Assessor of Limay without considering the declaration by NPC of the true current and fair market value of same. For ready reference, attached hereto are copies of the said NPC declaration and marked herein as Annexes “E” to “E-2”. The assessment was made without bases and therefore erroneous. Accordingly, the real property (sic) collected by your office for the period 1994-1996 on the properties of Bataan Combined Cycle Power Plant was more than what is due under the existing facts and law.

“We therefore request your office and the Municipal Assessor of Limay to cause the correction on the assessment and collection of the correct tax as pointed out above and thereupon issue to NPC a tax refund/credit of the portion of the tax paid based on erroneous assessment.

“For your consideration.”

5. On May 7, 1998, NPC filed its Petition (subscribed and sworn to by Petitioner’s Legal Counsel, Atty. Joseph Ferdinand M. Dechavez, on May 04, 1998) with the LBAA, praying that:

“1. Declare that the real property tax assessment on the petitioner’s taxable machineries,buildings and other improvements at its Bataan Combined Cycle Power Plant in Limay, Bataan is excessive;

“2. Order respondents Hermenegildo C. Pilapil and Rodolfo C. Gomez to revise the assessment;

“3. Order respondent Pastor P. Vichuaco to refund the excess payment of petitioner or in the event that the same is not possible reflect in its books as tax credit for the petitioner; x xx”

6. On May 22, 2000, the LBAA of the Province of Bataan issued a Resolution denying NPC’s petition for being filed out of time.

7. On September 17, 2003, this Board issued an Order, the dispositive portion of which reads as follows:

“WHEREFORE, the Resolution of the Local Board of Assessment Appeals of the Province of Bataan pertaining to its Order of Dismissal of the Appeal therein by the National Power Corporation, Petitioner-Appellant, for having been filed, not in accordance with the provisions of the Local Government Code of 1991 (R.A. 7160) and therefore (filed) out of time is hereby set aside. The Appeal filed pursuant to Sec. 252 of R.A. 7160 is hereby upheld. Hearing of the case on the merits will be on October 7, 2003, the parties are hereby ordered to act accordingly.”

8. In a Decision dated May 17, 2012, this Board ruled:

“This Board is in full accord with Respondents-Appellees’ view that Petitioner-Appellant is ‘effectively barred from questioning the assessment of the subject properties.’

“In the case ofTy vs. Trampe , the Supreme Court said:

‘X xx, the protest contemplated under Section 252 of R.A. 7160 is needed where there is a question as to the reasonableness of the amount assessed. Hence, if a taxpayer disputes the reasonableness of an increase in a real estate tax assessment, he is required to ‘first pay the tax’ under protest. Otherwise, the city or municipal treasurer will not act on his protest. In the case at bench however, the petitioners are questioning the very authority and power of the assessor, acting solely and independently, 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 the very validity of any increase.’

“The herein appeal is against the action of the treasurer, not against the action of the assessor. Petitioner-Appellant before this Board, however, did not adduce evidence against the action of the treasurer. Instead it proceeded against the action of the assessor which is not under appeal. Parenthetically, Petitioner-Appellant can no longer appeal the assessment made by the assessor as it is already barred by time.

“This Board is therefore constrained to dismiss the herein appeal for lack of merit. However, since there are accrued depreciations on the property, the treasurer concerned is hereby ordered to take full consideration thereof for Petitioner-Appellant.”

FINDINGS OF THIS BOARD

Sections 226 and 252 of R.A. 7160 (the “LGC”), respectively provide as follows:
“SEC. 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 declarations and such affidavits or documents submitted in support of the appeal.”

“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 treasurer or municipal treasurer, in the case of a municipality within Metropolitan Manila Area, who shall decide the protest within sixty (60) days from receipt.

”xxx

“(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.”

Assessment is the function of the assessor. The duty to collect the realty tax due on the assessment pertains to the 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, incorrect or otherwise unsatisfactory, his (the taxpayer’s) 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 perceived error complained of by the taxpayer in a given case. If the taxpayer’s complaint is in the assessment of the property (that is, in subjecting the property to realty tax, and/or in the valuation of the property, and/or in the classification and determination of the applicable assessment level), the perceived error complained of would be in the assessor’s actions, in which case Section 226 applies. On the other hand, if the taxpayer is satisfied with the assessor’s actions in the assessment of the property but the taxpayer is dissatisfied with the computation of the realty taxes and/or penalties thereon, the taxpayer’s recourse would be to file a protest under the provisions of Section 252.
In the instant appeal, while NPC, in a letter dated November 15, 1996, did protest its realty tax payment with the Provincial Treasurer, the Petition filed by NPC with the LBAA of Bataan on May 7, 1998 was primarily against the assessment made by the Respondent Assessor – not against the Treasurer’s constructive denial of NPC’s protest. In said Petition/Appeal, NPC prayed that the LBAA declare the assessment as excessive and, consequently, order the respondent assessors to revise said assessment. NPC’s prayer that the LBAA order the respondent treasurer to refund the “excess payment” is incidental to the first two reliefs prayed for. Clearly, therefore, Section 226 of the LGC applies to or in this case.
The treasurer’s duty is try to collect the tax based on the rates approved by the sanggunian in an ordinance. The alleged “excessiveness” of the realty tax on the subject properties is not attributable to the fault of the treasurer. Rather, it is the direct result of the action of the assessor in the assessment of the subject property.
The LBAA records show that the Written Notice of Assessment dated October 18, 1996 from the Municipal Assessor of Limay, Bataan, addressed to the VP and General Manager of NPC, was received by NPC’s MMRC on October 21, 1996; and that NPC filed its Petition (subscribed and sworn to on May 04, 1998 by Petitioner’s Legal Counsel, Atty. Joseph Ferdinand M. Dechavez) with the LBAA only on May 7, 1998.
The appeal to the LBAA should have been filed not later than December 20, 1996, the sixtieth (60th) day after October 21, 1996. As it is, NPC’s appeal to the LBAA was tardy for about One (1) year, four (4) months and seventeen (17) days.
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.”

“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.”

“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.”

“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.”

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.”
In retrospect, this Board committed at least two (2) errors in its Decision of May 17, 2012: (1) setting aside the LBAA’s Resolution of May 22, 2000; and (2) ordering the respondent treasurer to recognize the supposedly accrued depreciation allowance for the subject properties.
WHEREFORE, premises considered, this Board’s Decision of May 17, 2012 is hereby MODIFIED accordingly and Petitioner-Appellant’s instant Motion for Reconsideration is hereby DENIED.
SO ORDERED.

Manila, Philippines, March 22, 2013.

SIGNED
OFELIA A. MARQUEZ
Chairman

WITH DISSENTING OPINION SIGNED
ROBERTO D. GEOTINA CAMILO L. MONTENEGRO
Member Member