Facts:

The case involves Benguet Corporation as the petitioner and the Central Board of Assessment Appeals, the Board of Assessment Appeals of Zambales, the Provincial Assessor of Zambales, and the Municipality of San Marcelino as respondents. The controversy began in 1985 when the Provincial Assessor of Zambales assessed a realty tax amounting to P11,319,304.00 on the petitioner’s tailings dam and the land beneath it. The petitioner contested this assessment, arguing that the tailings dam should not be considered a taxable improvement. The initial appeal to the Board of Assessment Appeals of Zambales was dismissed on August 24, 1988, primarily due to the petitioner’s failure to pay the realty taxes due during the appeal process. Subsequently, the petitioner elevated the matter to the Central Board of Assessment Appeals, which, in a decision dated March 22, 1990, reversed the dismissal but upheld the assessment, stating that the tailings dam and the submerged lands were subject to r...

Facts:

1. Realty Tax Assessment: The case involves a realty tax assessment of P11,319,304.00 imposed on Benguet Corporation's tailings dam and the land beneath it. The assessment was made by the Provincial Assessor of Zambales in 1985.
2. Appeal to Local Board: Benguet Corporation protested the assessment and appealed to the Board of Assessment Appeals of Zambales. The appeal was dismissed on August 24, 1988, due to the petitioner's failure to pay realty taxes during the pendency of the appeal.
3. Appeal to Central Board: The petitioner elevated the matter to the Central Board of Assessment Appeals (CBAA), which reversed the dismissal but upheld the assessment, ruling that the tailings dam and submerged lands were subject to realty tax.
4. Nature of the Tailings Dam: The tailings dam is a construction adhered to the soil, making it immovable and thus real property under Article 415 of the New Civil Code. It is used partly as an anti-pollution device, but no law exempts it from taxation.
5. Valuation of Properties: The CBAA found the valuation of the submerged land at P50.00 per square meter reasonable, as it aligned with the Schedule of Market Values for Zambales.
6. Petitioner's Arguments: Benguet Corporation argued that:
   • The tailings dam is not an "improvement" under the Real Property Tax Code.
   • The dam has no separate value from the mine and is integral to mining operations.
   • The dam serves as an environmental pollution control device and should not be taxed.
   • The valuation of the dam and submerged lands is excessive and arbitrary.
   • Penalties for non-declaration should not apply due to the petitioner's honest belief that the tax was not due.

Issue:

• (Unlock)

Ruling:

• (Unlock)

Ratio:

1. Definition of Improvement: An "improvement" under the Real Property Tax Code is a valuable addition to property that enhances its value, beauty, or utility. The tailings dam qualifies as an improvement because it is permanent and enhances the utility of the mine.
2. Immovable Nature of the Dam: The dam is immovable property under Article 415 of the Civil Code, as it is adhered to the soil and cannot be separated without destruction. This makes it subject to realty tax.
3. Valuation and Expertise of CBAA: The Court respects the CBAA's expertise in assessment matters and found no grave abuse of discretion in its valuation of the properties.
4. Good Faith and Penalties: Penalties for non-declaration are not applicable when the taxpayer acts in good faith and does not intend to evade tax obligations. Benguet Corporation's honest belief that the tax was not due justified the removal of penalties.