Republic of the Philippines

CENTRAL BOARD OF ASSESSMENT APPEALS Manila

CENTRAL AZUCARERA DE BAIS, INC., Petitioner-Appellant,

– versus –

LOCAL BOARD OF ASSESSMENT

CBAA CASE NO. V-11 In Re:
TD Nos. 647, 6-481 and 6-478

APPEALS OF BAIS CITY,
Appellee,

LBAA Case No. 96-B-02 City of Bais

– and –

CITY ASSESSOR OF BAIS CITY, Respondent-Appellee.
x – – – – – – – – – – – – – – – – – – – – – – – – – – – – x

RESOLUTION

Before us is a Petition for Reconsideration filed by Petitioner-Appellant,

received by this Board on January 06, 1999, seeking reconsideration of this

Board’s decision on March 25, 1998, the dispositive portion of which reads as

follows:

“WHEREFORE, this Board resolved to AFFIRM en toto the Order of the Local Board of Assessment Appeals of Bais City dated November 5, 1996 in LBAA Case No. 96-B-02.”

Petitioner-Appellant, through counsels, seems to be so enraged or

infuriated that its Appellant’s Brief”, consisting of twenty-five (25) pages, was

denied by this Board in a decision consisting “of 8 pages, typewritten and

double spaced.” Petitioner-Appellant’s instant motion for reconsideration also

consists of twenty-five pages.

Petitioner-Appellant state that “The Honorable Office erred in affirming

the ruling of the respondent LBAA of Bais City, WITHOUT EVEN

CONSIDERING that:

“(1) The said pronouncement has no basis in fact and in law as it was evident that the blame should be upon the respondent-appellee City Assessor who erred in not ruling upon and in not returning petitioner-appellant’s “PETITION FOR RECOMPUTATION, REVISION, CORRECTION, AND/OR CANCELLATION OF ASSESSMENTS” on time.

“The Supreme Court has ruled in many instances that pleadings such as “PETITION FOR RECOMPUTATION, REVISION, CORRECTION, AND/OR CANCELLATION OF ASSESSMENTS”, could toll or suspend the running of

Reference: Book IX, pp. 202-208

the prescriptive period to file an appeal and thus, the appeal to LBAA was filed within the reglementary period allowed by law”

The records show that: (1) Petitioner-Appellant received copies of the

questioned tax declarations on December 20, 1995; (2) On February 16, 1996

Petitioner-Appellant filed with the office of Respondent-Appellee a “Petition for

Recomputation, Revision, Correction and/or Cancellation of Assessments”; (3)

On August 15, 1996 Petitioner-Appellant received through registered mail a

copy of the 1st Indorsement by Respondent-Appellee dated August 13, 1996,

together with the 1st Indorsement of the Acting Chairman of the LBAA of Bais

City who cited the provisions of Section 226 of R.A. 7160 as the governing law

on the matter; (4) Petitioner-Appellant filed its “Appeal on Assessment” with the

LBAA on the very day it was dated, October 9, 1996; (5) On November 7, 1996

Petitioner-Appellant received a copy of the Order of the Local Board dated

November 5, 1996 dismissing Petitioner-Appellant’s “Appeal on Assessment”

for not being filed within the reglementary period; and (6) On December 19,

1996 the Central Board received, through registered mail, copies of the

Petitioner-Appellant’s “Notice of Appeal” and “Appellant’s Brief”, both dated

December 5, 1996.

Petitioner-Appellant says that this Board “failed to consider that it is

respondent-appellee Bais City Assessor’s duty to rule upon Petitioner-

Appellant’s “Petition for Recomputation, Revision, Correction and/or

Cancellation of Assessments”, citing the following decisions of the Supreme

Court:

1. Surigao Electric Co., Inc. vs. Court of Tax Appeals (G.R. No. 25289, June 28, 1974):

“Prescinding from all the foregoing, we deem it appropriate to state that the Commissioner of Internal Revenue should always indicate to the taxpayer in clear and unequivocal language whenever his action on an assessment questioned by a taxpayer constitutes his final determination on the disputed assessment, as contemplated by sections 7 and 11 of Republic Act 1125, as amended, On the basis of this indicium indubitably showing that the Commissioner’s communicated action is his final decision on the contested assessment, the aggrieved taxpayer would then be able to take recourse to the tax court at the opportune time. Without needless difficulty, the taxpayer would be able to determine when his right to appeal to the tax court accrues. This rule of conduct would also obviate all desire and opportunity on the part of the taxpayer to continually delay the finality of the assessment and, consequently,

Reference: Book IX, pp. 202-208

the collection of the amount demanded as taxes by repeated requests for recomputation and reconsideration. On the part of the Commissioner, this would encourage his office to conduct a careful and thorough study of every questioned assessment and render a correct and definite decision thereon in the first instance. This would also deter the Commissioner from unfairly making the taxpayer grope in the dark and speculate as to which action constitutes the decision appealable to the tax court. Of greater import, this rule of conduct would meet a pressing need for fair play, regularity, and orderliness in administrative action.

“Taxes are the lifeblood of the government and so should be collected without unnecessary hindrance. On the other hand, such collection should be made in accordance with law as any arbitrariness will negate the very reason for government itself. It is therefore necessary to reconcile the apparently conflicting interests of the authorities and the taxpayers so that the real purpose of taxation, which is the promotion of the common good, may be achieved”

2. Commissioner of Internal Revenue vs. Wyett Suaco (202 SCRA 125, September 30, 1991)

“Furthermore, when Wyett Suaco thru its tax consultant SGV & Co. sent the letters protesting the assessments, the Bureau of Internal Revenue, Manufacturing Audit Division, conducted a review and reinvestigation of the assessments. This fact was admitted by Wyett Suaco thru its Finance Manager in a letter dated July 1, 1975 addressed to the Chief, Tax Accounts Division. The pertinent portion of said letter reads as follows:

“This will acknowledge receipt of your letter dated May 22, 1975 regarding our alleged income and business tax deficiencies for fiscal year 1972/73.

xxx xxx xxx

“Nevertheless, please be advised that the deficiency tax stated in your letter is what we are protesting on pursuant to the letters we filed with the Bureau of Internal Revenue on January 20, 1975 and on February 10, 1975.

xxx xxx xxx

“As we understand, the matter is now undergoing review and consideration by your Manufacturing Audit Division. Pending the outcome of their decision, we regret our inability to make settlement,’

“Although the protest letters prepared by SGV & Co. in behalf of private respondent did not categorically state or use the words “investigation” and reconsideration,” the same are to be treated as letters of reinvestigation and reconsideration. By virtue of these letters, the Bureau of Internal Revenue ordered 1st Manufacturing Audit Division to review the assessment made. Furthermore, private respondent’s claim that it did not seek reinvestigation or reconsideration of the assessments is belied by the subsequent correspondence or letters written by its officers, as shown above.

“The letters of Wyett Suaco interrupted the running of the five-year prescriptive period to collect the deficiency taxes. The Bureau of Internal Revenue, after having reviewed the record of Wyett Suaco, in accordance with its request for reinvestigation, rendered a final assessment. This final assessment issue(d) by the Acting Commissioner Ruben B. Ancheta was date(d) December 10, 1979 and received by private respondent on January 2, 1980, fixed its tax liability at P1,973,112.86 as deficiency withholding tax at source and P61,155.21 as deficiency sales tax. It was only upon receipt by Wyett Suaco of this final assessment that the five-year prescriptive period started to run again.

“Verily, the original assessments dated December 16 and 17, 1974 were both received by Wyett Suaco on December 19, 1974. However, when Wyett

Reference: Book IX, pp. 202-208

Suaco protested the assessments and sought its reconsideration in two (2) letters received by the Bureau of Internal Revenue on January 20 and February 10, 1975, the prescriptive period was interrupted. This period started to run again when the Bureau of Internal Revenue served the final assessment to Wyett Suaco on January 2, 1980. Since the warrants of distraint and levy were served on Wyett Suaco on March 12, 1980, then, only about four (4) months of the five-year prescriptive period was used.”

Based on the afore-cited Supreme Court decisions, Petitioner-Appellant

contends that Respondent-Appellee City Assessor had the duty to entertain the

former’s “Petition for Recomputation, Revision, Correction and/or Cancellation

of Assessments” and that the sixty-day prescriptive period was effectively

interrupted by the filing of sad “petition.”

We disagree on both counts. Clearly, the above-cited Supreme Court

decisions dealt with internal revenue taxes governed by the National Internal

Revenue Code (NIRC). They are not applicable to, and have no bearing in the

case at bar.

Real property taxes were governed by the Assessment Law

(Commonwealth Act No. 470), Real Property Tax Code (P.D. 464) and now by

the Local Government Code of 1991 (R.A. 7160).

The law applicable to the case at bar is Republic Act No. 7160 which took

effect on January 1, 1992. Section 226 thereof provides as follows:

“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 other affidavits or documents submitted in support of the appeal.” (Underscoring supplied)

As stated beforehand, Petitioner-Appellant received copies of the

questioned tax declarations on December 20, 1995 and filed its “Appeal on

Assessment” with the local board on October 9, 1996. It is very clear, therefore,

that the appeal to the local board was filed way out of time.

Petitioner-Appellant’s “Petition for Recomputation, Revision, Correction

and/or Cancellation of Assessments” was addressed to the sound discretion of

the Respondent-Appellee. It could be said that Respondent-Appellee “denied”

such petition by returning the same to Petitioner-Appellant. It remains, however,

Reference: Book IX, pp. 202-208

that the law does not command or require the assessor to act on every petition

for reconsideration or revision of assessments. Petitioner-Appellant should

have directly appealed to the LBAA in accordance with Section 226, R.A. 7160,

supra.

The sixty-day period for appeals in Section 226, supra, is mandatory and

jurisdictional (Garganita et al. vs. Court of Appeals, G.R. No. L-12104). A

taxpayer may file as many petitions for reconsideration as he likes, but the filing

and pendency of such petitions does not interrupt the prescriptive period for

appeals to the local board. Thus in Spouses Ramon A. Gonzales and Lilia

Yusay vs. Province of Iloilo (38 SCRA 209-227 [March 31, 1971]), the Supreme

Court said:

xxx

“1. A brief review of the existing laws and procedures concerning the assessment and taxation of real property will readily show the primacy of the tax court’s special jurisdiction over actions for refund of real estate taxes paid under a disputed assessment.

“Under the Assessment Law, the assessment of all real property within the province or city, i.e., the listing and valuation of real property for purposes of taxation, is made by the provincial or city assessor.

“When a valuation is placed on property newly declared or when a value greater than that stated in the declaration required of the owner (under section 1 of Commonwealth Act 530), or when an existing assessment is increased to an amount in excess of that so stated, the assessor must immediately give written notice of such assessment or increased assessment to the owner.

“A property owner not satisfied with the assessment must within sixty days from receipt of the written notice of assessment in the case of provinces and within the period of appeals stated in the charters in the case of cities, appeal to the corresponding board of assessment appeals, by filing a petition stating the grounds of his appeal.

“If no appeal to the Board of Assessment Appeals is made by the property owner within the statutory period, the assessment becomes final and unappealable. The owner cannot go to court to question any error in the assessment and to seek refund of the realty taxes paid, since as held in Victorias Milling Co., Inc. vs. Court of Tax Appeals, ‘By doctrine of primacy of Administrative remedy, the Provincial Board of Assessment Appeals had jurisdiction over the dispute to the exclusion of the court of first instance; and the party’s resort to the court of first instance instead of appealing to the Board of Assessment Appeals was held fatal to the claim for refund.” (Underscoring supplied)

Of course, the power of the Court of Tax Appeals to review decisions of

provincial or city boards of assessment appeals was transferred to the Central

Board of Assessment Appeals upon the effectivity of the Real Property Tax

Code (P.D. 464) which took effect on June 1, 1974:

Reference: Book IX, pp. 202-208

“The Solicitor General’s contention that the Court of Tax Appeals has exclusive appellate jurisdiction over this case is not correct. When Republic Act No. 1125 created the Tax Court in 1954, there was as yet no Central Board of Assessment Appeals. Section 3 of that law in providing that the Tax Court had jurisdiction to review by appeal decisions of provincial or city boards of assessment appeals had in mind the local boards of assessment appeals but not the Central Board of Assessment Appeals which under the Real Property Tax Code has appellate jurisdiction over decisions of the said local boards of assessment appeals and is, therefore, in the same category as the Tax Court. x x x. (Caltex Philippines) Inc. v. Central Board of Assessment Appeals and City Assessor of Pasay, G.R. No. 50466, May 31, 1982)

Petitioner-Appellant argues that its “Petition for Recomputation, Revision,

Correction and/or Cancellation of Assessments” and its Appeal to the LBAA

were both based on meritorious and legal grounds. Much as we would like to,

we could not discuss these grounds anymore as they became moot and

academic because the questioned assessments, erroneous they may be, had

become final and unappealable by virtue of the Petitioner-Appellant’s failure to

timely question the said assessments before the local board.

WHEREFORE, this Board resolved to DENY the instant “Petition for

Reconsideration” for lack of merit.

SO ORDERED.

Manila, Philippines, February 25, 1999.

VACANT Chairman

(Signed)
ANGEL P. PALOMARES Member

(Signed) BENJAMIN M. KASALA
Member

Reference: Book IX, pp. 202-208