Republic of the Philippines

CENTRAL BOARD OF ASSESSMENT APPEALS Manila

GMA NETWORK, INC.,

Petitioner-Appellant,

CBAA CASE NO. V-28 -versus-

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

-and-

HARLAN M. SOLIDUM, in his capacity as OIC PROVINCIAL ASSESSOR OF THE PROVINCE OF ROMBLON,
Respondent-Appellee. x———————————————-x

R E S O L U T I O N

On August 13, 2009, this Board rendered a Decision in the above-

entitled case dismissing the appeal for lack of merit.

Not satisfied, Petitioner-Appellant GMA Network, Inc. moved for a

reconsideration of said decision. The motion was posted at the SM Mall of Asia

Postal Station on September 14, 2009 and was received by this Board on

September 23, 2009.

Alleging that it received a copy of the questioned Decision on August 28,

2009, Petitioner-Appellant based its motion on the following ground:

THE HONORABLE BOARD ERRED WHEN IT DENIED THE INSTANT PETITION BY RULING THAT REPUBLIC ACT NO. 7252 DOES NOT CATEGORICALLY GRANT PETITIONER GMA EXEMPTION FROM REAL PROPERTY TAX.

In City Government of Quezon City v. Bayan Telecommunications, Inc.

(March 6, 2006, 484 SCRA 169) and Digital Telecommunications Philippines,

Inc. v. Province of Pangasinan (February 23, 2007, 516 SCRA 558), the

Supreme Court ruled that the phrase “exclusive of this franchise” means that

all of the real properties of Bayan Telecommunications, Inc. (“Bayantel”) and

Digital Telecommunications Philippines, Inc. (“Digitel”) “that are actually,

directly and exclusively used in the pursuit of their respective franchises are

exempt from realty taxes.”

In its decision of August 13, 2009 (the “Assailed Decision”) this Board

stated that the Supreme Court’s conclusions in the Bayantel and Digitel cases

were based on false premises because the phrase “exclusive of this franchise”

did not give Bayantel or Digitel any tax exemptions. Such phrase is just a

qualification of, or a limitation on, the phrase “personal property”. “Exclusive of”

means “not including” and, therefore, “exclusive of this franchise” actually

means “not including this franchise”. The first sentence of the tax

provisions of Bayantel and Digitel’s legislative franchises should read as

follows:

“The grantee, its successors or assigns shall be liable to pay the same taxes on their real estate, buildings, and personal property, not including this franchise, as other persons or corporations are now or hereafter may be required by law to pay.”

Petitioner GMA says that Our interpretation is contrary to, and cannot

prevail over, the Supreme Court’s own interpretation of the same phrase; that

“Supreme Court Decisions are not susceptible to review (by) any agency,

branch, department, or official of Government because the Supreme Court is

supreme ─ the third great department of government entrusted exclusively

with the judicial power to adjudicate with finality all justiciable disputes, public

and private, citing In Re Joaquin T. Borromeo, Ex Rel. Cebu City Chapter of

the Integrated Bar of the Philippines, A.M. No. 93-7-696-0, February 21, 1995.

Petitioner GMA could not say, however, that this Board’s interpretation

of the phrase “exclusive of” is incorrect because such interpretation is

absolutely correct as borne out by the Supreme Court’s decision en banc in

Digital Telecommunications Philippines, Inc. vs. City Government of Batangas,

et al. (G.R. No. 156040, December 11, 2008).

But GMA insists that this Board has no business disturbing the Supreme

Court decisions in Quezon City vs. Bayantel and Digitel vs. Pangasinan cases

since such judgments had become final and are, therefore, “binding on all

inferior courts and beyond their power and authority to alter or modify,” citing

Mangayao vs. D Guzoman (G.R. No. L-24787, February 22, 1974).

However, if we were to follow the line of thinking of Petitioner GMA, we

would be doing an INJUSTICE knowing fully well that the decisions in the

Quezon City vs. Bayantel and Digitel vs. Pangasinan cases were against the

law and, therefore, incorrect.

Petitioner GMA states that this Board’s “reliance in the case of RCPI vs.

Provincial Assessor of South Cotabato (G.R. No. 144486, 13 April 2005) in

declaring petitioner’s real properties as taxable is misplaced” and that this

Board “erroneously applied the principle of stare decisis” when it ruled that the

Supreme Court’s decision in the RCPI case should prevail over the Court’s

decisions in Bayantel and Digitel cases, given that the RCPI decision was

rendered earlier (April 13, 2005) than those in Bayantel (March 6, 2006) and

Digitel (February 23, 2007).

The RCPI case may not have exactly the same point at issue as those in

the Bayantel and Digitel cases. However, the franchises of Bayantel, Digitel,

GMA and RCPI have substantially the same ‘tax provisions’, thus:

Section 11 of RA 7633, amending RA 3259 (BAYANTEL’s Franchise):

“SEC. 11. The grantee, its successors or assigns shall be liable to pay the same taxes on their real estate, buildings and personal property, exclusive of this franchise, as other persons or corporations are now or hereafter may be required by law to pay. In addition thereto, the grantee, its successors or assigns shall pay a franchise tax equivalent to three percent (3%) of all gross receipts of the telephone or other telecommunications businesses transacted under this franchise by the grantee, its successors or assigns and the said percentage shall be in lieu of all taxes on this franchise or earnings thereof. Provided, That the grantee, its successors or assigns shall continue to be liable for income taxes payable under Title II of the National Internal Revenue Code x x x.” (Emphasis supplied)

Section 5 of Rep. Act No. 7678 (DIGITEL’S Franchise):

“SECTION 5. Tax Provisions. – The grantee shall be liable to pay the same taxes on its real estate, buildings, and personal property exclusive of this franchise as other persons or corporations are now or hereafter may be required by law to pay. In addition thereto, the grantee shall pay to the Bureau of Internal Revenue each year, within thirty (30) days after the audit and approval of the accounts, a franchise tax as may be prescribed by law of all gross receipts of the telephone or other telecommunications businesses transacted under this franchise by the grantee: Provided, That the grantee shall continue to be liable for income tax payable under Title II of the National Internal Revenue Code pursuant to Section 2 of Executive Order No. 72 unless the later enactment is amended or repealed, in which case the amendment or repeal shall be applicable thereto x x x.” (Emphasis supplied)

Section 8 of RA 7252 (GMA’s Franchise):

“SECTION 8. Tax Provisions. – The grantee, its successors or assigns shall be liable to pay the same taxes on their real estate, buildings, and personal property, exclusive of this franchise, as other persons or corporations are now or hereafter may be required by law to pay. In addition thereto, the grantee, its successors or assigns shall pay a franchise tax equivalent to three percent (3%) of all gross receipts of the radio/television business transacted under this franchise by the grantee, its successors or assigns and the said percentage shall be in lieu of all taxes on this franchise or earnings thereof: Provided, That the grantee, its successors or assigns shall continue to be liable for income taxes payable under Title II of the National Internal Revenue Code pursuant to Section 2 of Executive Order No. 72 unless the latter enactment is amended or repealed, in which case the amendment or repeal shall be applicable thereto.” (Emphasis supplied)

Section 14 of RA 2036, as amended by RA 4054 (RCPI’S Franchise):

“Sec. 14. In consideration of the franchise and rights granted and any provision of law to the contrary notwithstanding, the grantee shall pay the same taxes as are now or may hereafter be required by law from other individuals, copartnerships, private, public or quasi-public associations, corporations or joint stock companies, on real estate, buildings and other personal property except radio equipment, machinery and spare parts needed in connection with the business of the grantee, which shall be exempt from customs duties, tariffs and other taxes, as well as those properties declared exempt in this section. In consideration of the franchise, a tax equal to one and one-half per centum of all gross receipts from the business transacted under this franchise by the grantee shall be paid to the Treasurer of the Philippines each year, within ten days after the audit and approval of the accounts as prescribed in this Act. Said tax shall be in lieu of any and all taxes of any kind, nature or description levied, established or collected by any authority whatsoever, municipal, provincial or national, from which taxes the grantee is hereby expressly exempted. (Emphasis supplied)

As earlier stated herein, the phrase “personal property, exclusive of this

franchise” found in the tax provisions of the franchises of Bayantel, Digitel and

GMA means “personal properties, not including the franchise.” On the other

hand, the phrase “other personal property” found in the ‘tax provision’ in

RCPI’s franchise means “personal property, other than the franchise.” As in

the case of Bayantel or Digitel or GMA, RCPI shall pay the same taxes as are

now or may hereafter be required by law from other individuals, . . ., on real

estate, buildings and personal property, excluding the franchise itself. This

point was not at issue in the RCPI case because it is too obvious to belabor.

The decisions rendered by the Second and Third Divisions of the

Supreme Court in the Bayantel and Digitel cases, respectively, could not have

modified or reversed the decision of the First Division of the Court in the RCPI

case since, under Article VIII, Sec. 4(3) of The 1987 Constitution of the

Republic of the Philippines, it is provided that “. . . no doctrine or principle of

law laid down by the court in a decision rendered en banc or in division

may be modified or reversed except by the court sitting en banc.” Under

the principle of stare decisis, the decision rendered by the First Division of the

Supreme Court in the RCPI case should prevail over those rendered by the

Second and Third Divisions of the Court in Bayantel and Digitel cases,

respectively.

WHEREFORE, premises considered, the instant Motion for

Reconsideration is hereby DENIED.

SO ORDERED.

Manila, Philippines, March 1, 2010.

(Signed) CESAR S. GUTIERREZ
Chairman

(Signed)
ANGEL P. PALOMARES Member

(Signed) RAFAEL O. CORTES
Member