Case Digest (G.R. No. 180110)
Facts:
Capitol Wireless, Inc. (Capwire), a Philippine corporation providing international telecommunications services, entered into co-ownership agreements for several submarine cable systems, including the Asia Pacific Cable Network (APCN), Brunei-Malaysia-Philippines (BMP-CNS), SEA-ME-WE-3, and Guam-Philippines (GP-CNS) systems. Capwire claimed only an indefeasible right to capacity on the so-called Wet Segment of APCN, allegedly laid in international waters, and reported its cable interests in its books under “Indefeasible Rights in Cable Systems.” For loan restructuring, it engaged an appraiser and on May 15, 2000 filed a Sworn Statement of True Value with the Batangas Provincial Treasurer, declaring significant values for each cable system and noting interconnection at PLDT’s landing station in Nasugbu, Batangas. The Batangas Provincial Assessor issued Assessments of Real Property (ARPs), treating the submarine cables as taxable real property. After receiving a Warrant of Levy andCase Digest (G.R. No. 180110)
Facts:
- Parties
- Petitioner: Capitol Wireless, Inc. (“Capwire”), a Philippine corporation providing international telecommunications services.
- Respondents: Provincial Treasurer of Batangas; Provincial Assessor of Batangas; Municipal Treasurer and Municipal Assessor of Nasugbu, Batangas.
- International Submarine Cable Agreements and Ownership
- Capwire entered into co-ownership agreements for submarine cable networks:
- Asia Pacific Cable Network System (APCN)
- Brunei-Malaysia-Philippines Cable Network System (BMP-CNS)
- SEA-ME-WE-3 Cable Network System
- Guam-Philippines Cable Network System (GP-CNS)
- Capwire claims ownership only of the “Wet Segment” of APCN, laid in international waters; landing stations and Segment E in Nasugbu are owned by PLDT.
- Capwire’s interest: indefeasible right to use certain capacity, recorded in its books as “Indefeasible Rights in Cable Systems.”
- Tax Assessment and Protest
- For loan restructuring, Capwire had the system appraised and on May 15, 2000 submitted a Sworn Statement of True Value declaring:
- APCN – ₱203,300,000.00
- BMP-CNS – ₱65,662,000.00
- SEA-ME-WE-3 – ₱7,540,000.00
- GP-CNS – ₱1,789,000.00
- Batangas Provincial Assessor issued Assessments of Real Property (ARP) treating the cables as taxable real property with lower assessed values.
- Capwire protested, contending the cables lie in international waters and thus are not subject to Philippine real property tax.
- Procedural History
- Capwire received a Warrant of Levy (Feb. 7, 2003) and Notice of Auction Sale (Mar. 4, 2003).
- On March 10, 2003, Capwire filed a Petition for Prohibition and Declaration of Nullity before the RTC of Batangas for failure to follow administrative requirements.
- The RTC dismissed the petition (May 5, 2003) for failure to pay the tax under protest and to appeal to the Local Board of Assessment Appeals (LBAA); motion for reconsideration denied (Aug. 26, 2003).
- Capwire appealed to the Court of Appeals (CA), which on May 30, 2007 affirmed the RTC, holding factual questions required exhaustion of administrative remedies and payment under protest.
- Capwire filed a petition for review on certiorari under Rule 45 before the Supreme Court.
Issues:
- Administrative Remedies
- Whether the case is cognizable only after payment of tax under protest and exhaustion of remedies before the LBAA and Central Board of Assessment Appeals (CBAA) under Sections 206, 226, and 229 of the Local Government Code (LGC).
- Taxability of Submarine Cables
- Whether submarine communications cables (and Capwire’s indefeasible rights therein) qualify as taxable real property under Philippine law.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)