G.R. Nos.

L-49839-46 April 26, 1991

JOSE B. L. REYES and EDMUNDO A.
REYES,
petitioners, vs. PEDRO ALMANZOR,
VICENTE ABAD SANTOS, JOSE ROO, in
their capacities as appointed and Acting
Members of the CENTRAL BOARD OF
ASSESSMENT APPEALS; TERESITA H.
NOBLEJAS, ROMULO M. DEL ROSARIO,
RAUL C. FLORES, in their capacities as
appointed and Acting Members of the
BOARD OF ASSESSMENT APPEALS of
Manila; and NICOLAS CATIIL in his
capacity as City Assessor of Manila,
respondents
.
J.B.L. Reyes, Edmundo and Milagros Reyes
are owners of parcels of land situated in
Tondo which theylease to their tenants for
P300 monthly. Republic Act No. 6359
prohibiting for one year from its effectivity,an
increase in monthly rentals in properties
used for dwelling where such rental does not
exceed P300 amonth but allowing an
increase in rent by not more than 10%
thereafter.
The
said
Act
also
suspendedparagraph (1) of Article 1673 of
the Civil Code for two years from its
effectivity thereby disallowing theejectment
of lessees upon the expiration of the usual
legal period of lease. P. D. No. 20 amended
R.A.No. 6359 making the prohibition absolute
and
suspending
the
said
provision
indefinitely excepting leaseswith definite
period. The City Assessor re-classified and
reassessed the property of the petitioner
whichincreased their tax rate prompting
them to file a Memorandum of Disagreement
with the BTAA contendingthat reassessments
made
were
"excessive,
unwarranted,
inequitable,
confiscatory
and
unconstitutional".The
BTAA
denied
the
Memorandum of Disagreement, hence, the
Reyeses appealed to CBAA. CBAAconducted
an ocular inspection of the property and
found out that some of the properties were
belowstreet level affected by tides. CBAA
affirmed the decision of BTAA with
modification allowing a 20%reduction on the
market value of the properties affected by
tides. A motion for reconsideration by
thepetitioners was denied by the CBAA,
hence, this petition. Petitioners contended
that the Honorable Boarderred in adopting
the "comparable sales approach" method in
fixing
the
assessed
value
of
appellants'properties.
Issue:
Whether or not the tax imposed by the BTAA
is excessive
Ruling:
The power to tax is an attribute of
sovereignty. In fact, it is the strongest of all
the powers of

government. But for all its plenitude, the

power to tax is not unconfined as there are
restrictions. Adversely effecting as it does
property rights, both the due process and
equal protection clauses of the Constitution
may properly be invoked to invalidate in
appropriate cases a revenue measure. If it
were
otherwise, there would be truth to the 1903
dictum of Chief Justice Marshall that the
power to tax involves the power to destroy.
The web or unreality spun from Marshalls
famous dictum was brushed away by one
stroke of Mr. Justice Holmes pen, thus: The
power to tax is not the power to destroy
while this Court sits. So it is in the
Philippines.
(Sison, Jr. v. Ancheta, 130 SCRA 655 [1984]; Obillos, Jr.
v.Commissioner of Internal Revenue, 139
SCRA 439 [1985]). [Reyes vs. Almanzor, 196
SCRA 322(1991)])
Verily, taxes are the lifeblood of the
government and so should be collected
without unnecessary hindrance. However,
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 taxations, which is the promotion
of the common good, may be achieved
(Commissioner of Internal Revenue v. Algue,
Inc.,
etal.,
158
SCRA
9
[1988]).
Consequently, it stands to reason that
petitioners who are burdened by the
government by its Rental Freezing Laws
(then R.A. No. 6359 and P.D. 20) under the
principle of social justice should not now be
penalized by the same government by the
imposition of excessive taxes petitioners can
ill afford and eventually result in the
forfeiture of their properties. [Reyes vs.
Almanzor, 196SCRA 322(1991)]PREMISES
CONSIDERED, (a) the petition is GRANTED;
(b) the assailed decisions of public
respondents are REVERSED and SET ASIDE;
and (e) the respondent Board of Assessment
Appeals of Manila and the City Assessor of
Manila are ordered to make a new
assessment by the income approach method
to guarantee a fairer and more realistic basis
of computation. SO ORDERED.

G.R. No. L-28896 February 17, 1988

COMMISSIONER OF INTERNAL REVENUE,
petitioner,vs. ALGUE, INC., and THE
COURT OF TAX APPEALS, respondents.
ALGUE INC received a letter from petitioner
stating that it has delinquency of income
taxes amounting to P83,183.85 for the years
1958 and 1959. ALGUE filed a request for
reconsideration
to
deduct
P75,000
contending that it was a legitimate business

expense used as promotional fees. The

request was received by the office of the
petitioner and was duly stamped. A warrant
of distraint and levy was presented to ALGUE
through its counsel, Atty. Alberto Guevara, Jr.,
who refused to receive it on the ground of
the pending protest. A search of the protest
in the dockets of the case proved fruitless.
Atty. Guevara produced his file copy and
gave a photostat to BIR agent Ramon Reyes,
who deferred service of the warrant. BIR
informed ALGUE that they are not taking any
action on the protest and it was only then
that he accepted the warrant of distraint and
levy earlier sought to be served. After 16
days ALGUE filed a petition for review before
the CTA. CTA ruled in favor of ALGUE and
that the deduction was legitimately paid by
ALGUE for actual service rendered in the
form of promotional fees. Hence this petition.
Issue:
Whether or not the Collector of Internal
Revenue correctly disallowed the P75,000.00
deduction claimed by private respondent
Algue as legitimate business expenses in its
income tax returns
Ruling:
It should be remembered that this was a
family corporation where strict business
procedures were not applied and immediate
issuance of receipts was not required. Even
so, at the end of the year, when the books
were to be closed, each payee made an
accounting of all of the fees received by him
or her, to make up the total of P75,000.00.
Admittedly, everything seemed to be
informal.
This
arrangement
was
understandable, however, in view of the
close relationship among the persons in the
family corporation. 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.
ACCORDINGLY, the appealed decision of the
Court of Tax Appeals is AFFIRMED in toto,
without costs.
Pepsi-Cola Bottling of the Philippines,
Inc. v. Municipality of Tanauan G.R. No.
L-31156; February 27, 1976
Facts:
In Feb ru ary 1963, plain tiff comme nced
a
compl ain t
seekin g
to
declare
Se ction
2
of
R.A.
2264
(Local
Auton omy Act) uncon sti tu tional as an
un due deleg ation of taxin g p ower a n d

to declare Ordinance Nos. 23

and
27
issued
by
the
Municipality of Tanauan, Leyte as null and
void. M u n i c i p a l O r d i n a n c e N o . 2 3
levies
and
collects
from
soft
drinks producers and manufacturers onesixteenth (1/16) of a c e n t a v o f o r e v e r y
bottle of soft drink corked. On
t h e o t h e r hand , Muni cip al O rdin an ce
No. 27 le vies and colle cts on soft
drinks produced or manufactured
w i t h i n t h e t e r r i t o r i a l jurisdiction of
the municipality a tax of one centavo (P0.01)
on
each
gallon
of
volume
c a p a c i t y.
The
tax
imposed
in
both Ordinances Nos. 23 and 27
is
denominated
as
"municipal
production tax.
Issues:
( 1) Is Se cti on 2 of R.A. 2264 an und ue
del egati on
of t h e
power
of
taxation? (2) Do Ordinance Nos.
2 3 a n d 2 4 consti tu te double taxation
and imp ose pe rcen tag e or spe ci fi c
taxes?
Held:
( 1) NO. The p owe r of taxation i s
pu rely
legislati ve
and
cannot be
delegated to the executive or judicial
department
of t h e
government
without infringing upon the
t h e o r y o f separation of powers. But as
an exception, the theory does not appl y to
muni cip al
corp orations.
Legi sl ative
p ow ers may be del egated to local
g overnments in respe ct of matte rs of
l ocal concern.
(2) NO. The Municipality of Tanauan
discovered that manu factu rers cou ld
in cre ase
the volu me contents of
e ach b ottl e and still p ay the same tax
rate since tax is impose d on e v e r y
b o t t l e c o r k e d . To c o m b a t t h i s
scheme,
Municipal
Ordinance
No. 27 was enacted. As such, it
was
a
repeal
o f Mu nicip al
O rdin an ce No. 23. In the stip ulati on of
f acts, the parties admitte d that the
Mu nicip al Tre asu rer was enforcin g
Municipal Ordinance No. 27 only. Hence,
there was no case of double taxation

G.R. No. 124043 October 14, 1998

COMMISSIONER OF INTERNAL REVENUE,
petitioner, vs. COURT OF APPEALS,
COURT OF TAX APPEALS and YOUNG
MEN'S CHRISTIAN ASSOCIATION OF THE
PHILIPPINES, INC., respondents.
YMCA, a non-stock non-profit organization
earned an income of P676,829.80 from
leasing out a portion of its premises to small

shop owners, like restaurants and canteen

operators, and P44,259.00 from parking fees
collected from non-members. CIR issued an
assessment
to
YMCA
amounting
toP415,615.01 as deficiency on income tax,
expanded withholding tax and withholding
tax on wage. YMCA filed a letter of protest
but it was denied by the CIR.YMCA filed a
petition for review before CTA contending
that the income generated by the rents and
parking fees were used to cover its operation
and maintenance. CTA ruled that the leasing
of the property and parking fees collected
are reasonably incidental to and reasonably
necessary for the accomplishment of the
objectives of the YMCA. An appeal by the CIR
to CA reversed the decision of CTA. YMCA
filed a motion for reconsideration before the
CA which reversed its earlier decision. Hence
this petition.
Issue:
Whether or not income derived from rentals
of real property owned by YMCA is subject to
income tax
Ruling:
Sec. 27 (NIRC).
Exemptions from tax on corporations
.

The following organizations shall not be

taxed under this Title in respect to income
received by them as such

xxx xxx xxx(g) Civic league or organization

not organized for profit but operated
exclusively for the promotion of social
welfare;(h) Club organized and operated
exclusively for pleasure, recreation, and
other non-profitable purposes, no part of the
net income of which inures to the benefit of
any private stockholder or member; xxx xxx
xxx Notwithstanding the provisions in the
preceding paragraphs, the income of
whatever kind and character of the foregoing
organizations from any of their properties,
real or personal, or from any of their
activities conducted for profit, regardless of
the disposition made of such income, shall
be subject to the tax imposed under this
Code. (as amended by Pres. Decree No.
1457)Because taxes are the lifeblood of the
nation, the Court has always applied the
doctrine of strict in interpretation in
construing tax exemptions. Furthermore, a
claim of statutory exemption from taxation
should be manifest and unmistakable from
the language of the law on which it is based.
Thus, the claimed exemption "must expressly
be granted in a statute stated in a language
too clear to be mistaken."The phrase "any of
their activities conducted for profit" does not
qualify the word "properties." This makes
from the property of the organization
taxable, regardless of how that income is
used

whether for profit or for lofty non-profit

purposes.
Verba legis non est recedendum
, Where the law does not distinguish, neither
should we. WHEREFORE, the petition is
GRANTED. The Resolutions of the Court of
Appeals dated September 28,1995 and
February 29, 1996 are hereby REVERSED and
SET ASIDE.

Villanueva vs. City Of Iloilo

(26 SCRA 578)
FACTS:
Relying on the passage of RA 2264 or the
Local Autonomy Act, Iloilo enacted Ordinance
11 Series of 1960, imposing a municipal
license tax on tenement houses in
accordance with the schedule of payment
provided by therein. Villanueva and the
other appellees are apartment owners from
whom the city collected license taxes by
virtue of Ordinance 11. Appellees aver that
the said ordinance is unconstitutional for RA
2264 does not empower cities to impose
apartment taxes; that the same is oppressive
and unreasonable for it penalizes those who
fail to pay the apartment taxes; that it
constitutes not only double taxation but
treble taxation; and, that it violates
uniformity of taxation.
Issues:
1. Does the ordinance impose double
taxation?
2. Is Iloilo city empowered by RA 2264 to
impose tenement taxes?
RULING:
While it is true that appellees are taxable
under the NIRC as real estate dealers, and
taxable under Ordinance 11, double taxation
may not be invoked. This is because the
same tax may be imposed by the national
government as well as by the local
government. The contention that appellees
are doubly taxed because they are paying
real estate taxes and the tenement tax is
also devoid of merit. A license tax may
believed upon a business or occupation
although the land or property used in
connection therewith is subject to property
tax. In order to constitute double taxation,
both taxes must be the same kind or
character. Real estate taxes and tenement
taxes are not of the same character. RA 2264
confers local governments broad taxing
powers. The imposition of the tenement
taxes does not fall within the exceptions
mentioned by the same law. It is argued
however that the said taxes are real estate

taxes and thus, the imposition of more the 1

per centum real estate tax which is the limit
provided by CA 158, makes the said
ordinance ultra vires. The court ruled that
the tax in question is not a real estate tax. It
does not have the attributes of a real estate
tax. By the title and the terms of the
ordinance, the tax is a municipal tax which
means an imposition or exaction on the right
to use or dispose of property, to pursue a
business, occupation or calling, or to exercise
a privilege. Tenement houses being offered
for rent or lease constitute a distinct form of
business or calling and as such, the
imposition of municipal tax finds support in
Section2 of RA 2264.

Emerlinda S. Talento, in her capacity

as the Provincial Treasurer of the
Province of Bataan vs. Hon. Remigio M.
Escalada, Jr., Presiding Judge of the
Regional Trial Court of Bataan, Branch 3
and Petron Corporation, Supreme
Court, Third Division, G. R. No. 180884.
Introduction
1. In the Decision dated 27 June 2008, as
reiterated in the Resolution dated 8
September 2008 dismissing the 1st Motion
for Reconsideration (MR) in the abovecaptioned, the SC set forth the ruling that
taxpayers can defer payments of real estate
tax by simply filing 1) an appeal with the
Local Board of Assessment Appeals and 2) a
Petition for Prohibition with the Regional Trial
Court and by posting a surety bond.
2. This ruling has extremely serious
implications, not only to the LGUs of Bataan,
but all over the country. It practically
amended, through judicial legislation, the
expressed
provisions
of
the
Local
Government Code (LGC) of 1991 that a
taxpayer cannot defer and must first pay to
the LGU the real estate tax due before any
appeal can be entertained.
3. Thus, LGUs will no longer receive cash
payments from real estate tax collections as
they fall due but merely surety bonds, which
have no immediate use to LGUs. One-half of
the proceeds of RPT accrues to the general
funds of provinces, cities, municipalities and
barangays, while the other half accrues to
the Special Education Fund of their Local
School Boards. With such erroneous ruling,
LGUs and ultimately the people are bound to
suffer, particularly the children from poor
families who go to public schools.

Summary of the Relevant Facts:

(1)
On 18 June 2007, Petron received
from the Provincial Assessors Office of
Bataan a notice of revised assessment for
deficiency real property tax for Petrons
machineries and equipment in Lamao,
Limay,
Bataan
in
the
amount
of
PhP1,731,025,403.06 due from 1994 up to
the 2nd quarter of 2007.
(2)
On 17 August 2007, Petron filed a
petition with the Local Board of Assessment
Appeals (LBAA) contesting the revised
assessment.
(3)
On 22 August 2007, Petron
received from Petitioner (the Provincial
Treasurer of Bataan) a final notice of
delinquent real property tax with warning
that the subject properties would be levied
and auctioned should Petron fail to settle the
revised assessment.
(4)
Petron wrote a letter to Petitioner
stating that in view of the pendency of the
appeal with the LBAA, any action on the
subject properties would be premature.
Petitioner replied that only payment by
Petron under protest shall bar the collection
of the taxes due, pursuant to Sections 231
and 252 of the Local Government Code.
(5)
Subsequently a Warrant of Levy
was
issued
against
machinery
and
equipment of Petron.
(6)
Petron filed with the LBAA on 24
September 2007 an urgent motion to lift final
notice of delinquent real property tax and
Warrant of Levy.
(7)
On 3 October 2007, Petron received
a notice of sale of its properties scheduled on
17 October 2007.
(8)
Petron
subsequently
merely
withdrew its motion to lift final notice of
delinquency and Warrant of Levy with the
LBAA on 8 October 2007. On the same date,
Petron filed with the Regional Trial Court of
Bataan the present case (Civil Case No.
8801) against Petitioner for prohibition with
prayer for issuance of temporary restraining
order and preliminary injunction. (NOTE: To
avoid questions of forum shopping, what
Petron should have done was to first
withdraw its appeal entirely from the LBAA
and then file the Petition for Prohibition with
the RTC.)
(9)
Civil Case No. 8801 was filed by
Petron with the RTC while its petition with the
LBAA was still pending. Subsequently, the
LBAA dismissed Petrons petition on the
ground of forum shopping.

(10)
On 15 October 2007, the RTC issued
a TRO for 20 days enjoining Petitioner from
proceeding with the public auction of
Petrons properties.

she filed a Petition for Certiorari under

Rule 65, when the proper mode should
have been a Petition for Review under
Rule 45.

(11)
Petitioner filed an urgent motion for
the immediate dissolution of the TRO as well
as motion to dismiss Petrons petition for
prohibition.

3. Under Rule 45, the period to file a

Petition for Review is 15 days from
receipt of the Order appealed from.
The Decision stated that the present
Petition was filed beyond the said 15
day period as it was filed 43 days late.

(12)
On 5 November 2007, the RTC
issued the Order granting Petrons petition
for the issuance of the writ of preliminary
injunction subject to Petrons posting of a
PhP 444,967,503.52 bond in addition to its
previously
posted
surety
bond
of
PhP1,286,057,899.54.
(13)
In view of the urgent nature of the
case and the patently illegal order of the
RTC, which was Order was tainted with grave
abuse of discretion, Petitioner no longer filed
a Motion for Reconsideration of the Order
dated 5 November 2007.
(14)
On 4 January 2008, Petitioner filed
the present Petition for Certiorari, Prohibition
and Mandamus (G.R. No. 180884) with the
Supreme Court, as an exception to the rule
on hierarchy of courts, to annul and set aside
the Order of the RTC dated 5 November 2007
to permanently enjoin the RTC from further
proceeding with Civil Case No. 8801.
(15)
All of the foregoing actions of the
Petitioner
were
consistent
with
law,
particularly with the Local Government Code,
contrary to Petrons allegations.
Issue raised in the Petition for Certiorari,
Prohibition and Mandamus:
Whether or not the RTC acted without or in
excess of its jurisdiction and with grave
abuse of discretion in causing the issuance of
the writ of preliminary injunction that
effectively renders nugatory the express
provisions of Sections 252 and 231 of the
Local Government Code.
Summary of The Supreme Courts Decision
dated 27 June 2008:
1. In the Decision of the Supreme Court
dated 27 June 2008, penned by Justice
Consuelo Ynares-Santiago, regarding
the above-stated Petition for Certiorari
(G.R. No. 180884), it was held that the
question posed in the Petition, i.e.,
whether the collection of taxes may be
suspended by reason of filing of an
appeal and posting of a surety bond, is
a question of law.
2. The Decision stated that Petitioner
resorted to an erroneous remedy when

4. The Decision further stated that, even

on the assumption that a petition
under Rule 65 is the proper remedy,
the present petition is still dismissable.
It was noted that Petitioner did not file
a Motion for Reconsideration with the
RTC prior to the filing of the present
Petition with the Supreme Court.
5. The Decision likewise stated that
Petitioner disregarded the hierarchy of
courts, and that the present Petition
should have been filed with the Court
of Appeals instead of directly filing the
same to the Supreme Court.
6. The Decision went on to state that the
RTC correctly granted Petrons petition
for issuance of a writ of preliminary
injunction based on Section 3, Rule 58
of the Rules of Court.
7. It was stated that there was urgency
and paramount necessity for the
issuance of the writ of injunction
considering that what is being
enjoined is the sale by public auction
of 1.7 Billion Pesos worth of Petrons
properties which are vital to Petrons
operations.
8. The Decision also stated in essence
that
Petron
had
a
clear
and
unmistakable right to refuse or to
withhold in abeyance the payment of
the taxes. Citing the grounds used by
Petron in contesting the revised
assessment, the Decision stated that
the resolution of the said issues would
have a direct bearing on the
assessment made by Petitioner, and
that it is necessary that the issues
must be first passed upon before the
properties of respondent is sold at
public auction.
Courses of Action Taken by Petitioner in light
of the said Decision Supreme Court dated 27
June 2008:
1. Petitioner filed with the Supreme Court
a Motion for Reconsideration of the
Decision dated 27 June 2008. This
Motion for Reconsideration was denied

by the Supreme Court in a minute

resolution dated 8 September 2008.
2. Petitioner filed a Motion to Refer the
Case to the Court en Banc. This is due
to the fact that the Decision dated 27
June 2008 has in effect abandoned
established jurisprudence that Rule 65
is the remedy for interlocutory orders
such as the issuance of a writ of
preliminary injunction, and the ruling
in Manila Electric Company vs. Barlis
(G.R. No. 114231, 18 May 2001) that
the trial court has no jurisdiction to
entertain a Petition for Prohibition
absent petitioners payment, under
protest, of the tax assessed. This
motion was likewise denied in the said
resolution dated 8 September 2008.

4. In
light
of
the
established
jurisprudence on the matter, it is
extremely surprising why the subject
Decision dated 27 June 2008 ruled that
Petitioner availed of the wrong remedy
under Rule 65. The said Decision runs
counter to and in effect abandons
prevailing
jurisprudence
that
interlocutory orders, such as an order
granting
a
writ
of
preliminary
injunction, may be questioned in a
higher court by way of Certiorari under
Rule 65.
Re: On the finding that the Petition is fatally
defective due to Petitioners failure to file a
Motion for Reconsideration of the RTCs Order
dated 5 November 2007.
COMMENT:

Comments on the Decision of the Supreme

Court dated 27 June 2008.
Re: On the finding in the Decision dated 27
June 2008 that Petitioner resorted to an
erroneous remedy when she filed a Petition
for Certiorari under Rule 65, when the proper
mode should have been a Petition for Review
under Rule 45.
COMMENT:
1. The Order of the RTC granting the writ
of preliminary injunction prayed for by
Petron was an interlocutory order.
Hence, Petitioner may validly file a
Petition for Certiorari under Rule 65 to
question the legality of such order of
the RTC.
2. In the 7 August 2007 Supreme Court
Decision entitled United Overseas
Bank (formerly Westmont Bank)
vs. Hon. Judge Reynaldo Rios,
Presiding Judge of the Regional
Trial Court of Manila, Branch 33,
and
Rosemoor
Mining
and
Development Corporation, G.R.
No. 171532, it was confirmed that a
petition for certiorari under Rule 65,
and not Rule 45, is the proper remedy
for interlocutory orders.
3. In the Supreme Court Decision dated 5
August 2003 which was penned by
Justice
Consuelo
Ynares-Santiago
herself, entitled Land Bank of the
Philippines vs. Severino Listana,
Jr., G. R. 152611, the Supreme
Court specifically provided that an
order
granting
a
writ
of
preliminary
injunction
is
an
interlocutory order. Being an
interlocutory order, a special civil
action for certiorari under Rule 65 is a
proper remedy.

1. While it may be true that the general

rule
is
that
a
motion
for
reconsideration is a condition sine qua
non for the filing of a petition for
certiorari, such rule nevertheless is
subject to recognized exceptions. The
Petition for Certiorari, Prohibition and
Mandamus
filed
by
Petitioner
specifically alleged that it falls within
such recognized exceptions to the
general rule. As such, it was pointed
out in the said Petition that resort to
the Supreme Court without filing of a
motion
for
reconsideration
was
dictated by considerations of urgency,
and that the issues raised are purely
legal in nature.
2. In the case of Indiana Aerospace
University vs. Commission on
Higher
Education,
G.R.
No.
139371, cited in Petitioners Motion
for Reconsideration, the recognized
exceptions to the general rule are: (a)
the issues raised are purely legal in
nature; (b) public interest is involved;
(c) extreme urgency is obvious; (d)
special circumstances that warrant
immediate or more direct action. The
case involves the collection of taxes
due the local government unit in the
amount of 1.7 Billion Pesos and the
writ of preliminary injunction has
deprived the local government unit the
right to immediately collect such real
property taxes to the detriment of its
constituents. Not only was there
urgency involved, but public interest
was likewise a principal consideration.
3. In view of the foregoing reasons, the
Decision should have allowed the
Petition to fall under the exception to
the general rule on the requirement of
a motion for reconsideration.

Re: On the finding that Petitioner disregarded

the rule on hierarchy of courts.
COMMENT:
1. The Decision dated 27 June 2008
likewise faulted Petitioner for filing the
Petition directly to the Supreme Court
instead of having the same filed with
the Court of Appeals. Again, such rule
on hierarchy of courts is subject to
certain
exceptions.
The
present
Petition is one such exception.
2. There are compelling reasons to file
the Petition directly to the Supreme
Court. The case has far reaching
implications on the right of local
government units to collect real
property taxes that it can use for
public services and to finance the cost
of public education. The resolution of
the issue of whether or not a trial
court can prohibit a local government
unit to collect real property taxes,
despite provisions in the Local
Government Code favoring such power
of the local government units, will
affect not only the Province of Bataan,
but all local government units in the
country as well. It will have significant
importance on the finances and
economic
viability
of
all
local
government units.

necessity for the issuance of the writ

of preliminary injunction.
3. The Decision in essence also declared
that
Petron
has
a
clear
and
unmistakable right to refuse or hold in
abeyance the payment of the taxes. In
support of this, the Decision cited the
grounds relied upon by Petron in
contesting the revised assessment.
The Decision then stated that the
resolution of the grounds raised by
Petron would have a direct bearing on
the assessment made by Petitioner
and that it is necessary that the issues
must first be passed upon before the
properties of respondent is sold at
public auction.
4. It should be noted however that the
RTC, in its Order dated 5 November
2007, in justifying the issuance of the
writ of preliminary injunction, used as
basis the provisions of Section 267 of
the Local Government Code. Section
267 provides that:
SEC. 267. Action Assailing Validity of Tax
Sale. - No court shall entertain any action
assailing the validity of any sale at public
auction of real property or rights therein
under this Title until the taxpayer shall
have deposited with the court the
amount for which the real property
was sold, together with interest of two
percent (2%) per month from the date of
sale to the time of the institution of the
action. The amount so deposited shall be
paid to the purchaser at the auction sale if
the deed is declared invalid but it shall be
returned to the depositor if the action fails.
Neither shall any court declare a sale at
public auction invalid by reason of
irregularities
or
informalities
in
the
proceedings unless the substantive rights
of the delinquent owner of the real property
or the person having legal interest therein
have been impaired.

Re: On the finding that the RTC correctly

granted Petrons petition for issuance of a
writ of preliminary injunction.
COMMENT:
1. The Decision declared that there was
urgent and paramount necessity for
the issuance of the writ of injunction
considering that what is being
enjoined is the sale by public auction
of the properties of Petron amounting
to 1.7 Billion Pesos, which properties
are vital to Petrons operation.
2. However, there is no urgent and
paramount necessity on the part of
Petron. Even assuming that the
properties are sold by the Province of
Bataan by public auction, under
Section 261 of the Local Government
Code, Petron has the right to redeem
the properties within one (1) year from
the date of the sale. During such one
(1) year period, Petron shall have
possession of the subject properties
and Petron shall be entitled to the
income and other fruits thereof. In
light of this, Petrons operations will
not be immediately affected. As such,
there is no urgent and paramount

5.
6. The
above-quoted
Section
267
specifically applies to a case where the
property has already been sold at
public auction due to delinquency for
real property tax. It does not apply in
the present case where the property
has not yet been sold. It was patently
erroneous for the RTC to use Section
267 as legal basis for granting the writ
of preliminary injunction in favor of
Petron. Such act of the RTC amounts to
excess of jurisdiction as the RTC
overstepped its lawful authority. There
was likewise grave abuse of discretion
as such patently erroneous use by the
RTC of Section 267 as basis is

capricious, whimsical, arbitrary or

despotic in manner, and is in effect
equivalent to lack of jurisdiction.

government unit concerned. This was

no longer taken into consideration in
the Decision.

7. The patently erroneous reliance by the

RTC on Section 267 of the Local
Government Code is one indication
that there was no clear and
unmistakable right in favor of Petron.
Despite this, the Decision dated 27
June 2008 still validated the writ of
preliminary injunction granted by the
RTC to Petron.

11.The amount of deficiency real estate

tax due Petron was in fact arrived at
following data supplied by Petron
itself. Such data consisting of annual
acquisition costs of machineries can
be seen from the printed copies of the
electronic email of one Arvin Frank C.
Daquiog of the Government Reports
and
Compliance
Controllers
Department of Petron and the
attached computation/data send on 20
March 2007 to the Bataan Provincial
Assessor. (Annexes A-MR and B-MR
of
Petitioners
Motion
for
Reconsideration) The said data from
Petron itself show that the Sworn
Statement of the True Value of the
Real Properties previously submitted
by Petron was grossly understated. In
light of this, it is an error to rule that
Petron had a clear and unmistakable
right to hold in abeyance the payment
of real property tax.

8. On the other hand, Sections 252 and

231 of the Local Government Code
gives the clear and unmistakable right
to Petitioner to collect the real
property taxes due. Under Section
252, no protest shall be entertained
unless the taxpayer first pays the tax.
Under
Section
231,
appeal
on
assessments of real property shall in
no case suspend the collection of the
corresponding
realty
taxes
on
property.
9. In Manila Electric Company vs.
Barlis, G.R. No. 114231, 18 May 2001,
the Supreme Court, interpreting a
provision in the previous Real Property
Tax Code which similar to Section 252
of the Local Govt. Code, held that the
trial court has no jurisdiction to
entertain a Petition for Prohibition
absent petitioners payment, under
protest of the tax assessed as required
by Section 64 of the RPTC. It is our
view that this ruling is still valid
despite the passage of the Local
Government Code as the reason
behind the law remains the same. In
view of this ruling, the RTC had no
authority to grant the writ of
preliminary injunction in favor of
Petron. This is another basis for stating
that Petron had no clear and
unmistakable right.
10.Even assuming that there is doubt in
the interpretation of Sections 252 and
231 of the Local Government Code,
such doubt should have been resolved
in favor of the LGU. Section 5 (a),
Chapter 1, Title 1 of the Local
Government Code provides that in the
interpretation of the provisions of the
same, any provision on a power of a
local government unit shall be liberally
interpreted in its favor, and in case of
doubt, any question thereon shall be
resolved in favor of devolution of
powers and of the local government
unit. If further provides that any fair
and reasonable doubt as to the
existence of the power shall be
interpreted in favor of the local

Re: On the issue of forum shopping

committed by Petron, which was not
discussed and was not ruled upon in the
Decision of the Supreme Court.
COMMENT:
1. The Petition of Petron with the RTC
(Case No. 8801) was filed while
Petrons Petition with the LBAA is
pending. The case with the RTC and
the LBAA filed by Petron involved an
identity of parties, identity of rights
asserted and reliefs prayed for, and a
decision on one case will amount to
res adjudicata. Petron was therefore
guilty of forum shopping.
2. The issue of forum shopping was
squarely raised by Petitioner in the
Petition for Certiorari, Prohibition and
Mandamus. On account of such forum
shopping, the RTC should have
dismissed the complaint of Petron
entirely. Instead, the RTC even issued
the subject writ of preliminary
injuction.
3. The LBAA has in fact dismissed the
Petition of Petron on account of such
forum shopping committed by Petron.
4. However, the Decision dated 27 June
2008 never mentioned anything about
this issue of forum shopping.
5. Per the ruling of the Supreme Court in
City Government of Quezon City vs.

Bayan Telecommunications, Inc., G.R.

No. 162015, 6 March 2006, the proper
procedure is to first withdraw the
appeal from the LBAA and then file the
Petition for Prohibition with the RTC.
However, Petron did not comply with
this and instead maintained the LBAA

case while it filed the RTC case in

violation of the rule against forum
shopping and multiplicity of suits
based on a single cause of action