G.R. No. 233861 - City of Iloilo vs. Philippine Ports Authority

The petitioner, City of Iloilo, initiated the proceedings against the respondents, Philippine Ports Authority (PPA) and Development Bank of the Philippines (DBP).
The issue arose from the issuance of a Notice of Garnishment by petitioner aiming to levy bank deposits of PPA to satisfy alleged realty and business tax delinquencies.

On November 3, 2005, DBP received a Notice of Garnishment pursuant to the City of Iloilo’s directive.
The notice sought collection of Php44,298,470.11 based on PPA’s tax liabilities as determined in Supreme Court decisions in G.R. Nos. 109791 and 143214.
These judgments addressed realty and business taxes, including delinquencies, interest, charges, and penalties.

PPA contended that its tax liabilities—both local and real property taxes—had already been settled under the Supreme Court decisions cited, and therefore requested that the Notice of Garnishment be recalled.
PPA further sought that DBP release its funds from garnishment, but these efforts were unsuccessful.
On June 5, 2009, PPA filed a complaint for declaration of nullity of the Notice of Garnishment and for temporary relief (TRO and/or writ of preliminary injunction) before the Regional Trial Court (RTC) of Manila.
In its answer, DBP acknowledged the legal authority of local government units to issue such notices against delinquent taxpayers’ bank deposits, yet emphasized its lack of power to confirm if PPA had already settled its tax obligations.

The RTC denied PPA’s application for a writ of injunction on July 23, 2009.
PPA questioned the RTC resolution before the Court of Appeals (CA) via a petition for certiorari, which was denied.
On September 19, 2012, after further proceedings, the RTC rendered a Decision dismissing PPA’s complaint for lack of merit, particularly noting that the garnishment covered liabilities beyond those adjudicated in the Supreme Court cases.
The CA, in its ruling on November 22, 2016, reversed the earlier action by declaring the Notice of Garnishment void and directing the City of Iloilo to return Php26,661,552.41 to PPA.

On November 7, 2013, the petitioner requested DBP to release additional funds from PPA’s accounts in light of the finality of the Supreme Court decision in G.R. No. 204908.
DBP remitted amounts on November 26, 2013 (Php3,892,372.99) and on December 18, 2013 (an additional Php554,959.72).
On November 20, 2014, the petitioner issued further notices of assessment regarding PPA’s real property tax liabilities for the year 2015.

Whether the Court of Appeals correctly exercised jurisdiction in reviewing the RTC decision, despite arguments that the matter should fall under the exclusive jurisdiction of the Court of Tax Appeals (CTA) as a local tax case.
Whether the CA erred in denying the petitioner’s motion for reconsideration on the grounds of jurisdiction and the composition of the subject matter.

Whether the Notice of Garnishment issued by the City of Iloilo was valid given that PPA had already paid its tax liabilities as adjudicated in G.R. Nos. 109791 and 143214.
Whether the notice adhered to the constitutional and statutory due process requirements, including proper assessment and notification of tax deficiencies.

Whether the issuance of the Notice of Garnishment violated provisions under Sections 175 and 195 of the Local Government Code (LGC) relating to the proper procedure for distraint and notice of assessment.
Whether combining PPA’s allegedly other tax liabilities with those already adjudicated amounted to a circumvention of due process.